LEGAL AND REGULATORY AFFAIRS

LRA works on a wide array of issues affecting our members, including advisor professionalism; titles, designations and proficiencies; compensation and conflicts of interest; emerging technological trends in the regulatory-advisory space; and standards of conduct in the advisor-client relationship.

Title Protection Becomes a Reality

After several years of intense advocacy work, Advocis’ efforts bore fruit. In March 2022, Ontario’s title protection regime received ministerial approval and came into force on March 28. Soon thereafter, on April 11, the Financial Services Regulatory Authority of Ontario (FSRA) announced that it had approved Advocis’ own Institute for Advance Financial Education (the Institute) in the first tranche of Credentialing Bodies under the framework. FSRA also recognized the CLU designation as a credential for the use of the Financial Planner title, and the PFA designation for the use of the Financial Advisor title.

Both the LRA and GR functions were critical to these efforts. We were involved through the framework development process for over a decade, starting when title protection was a mere policy proposal, through some false starts with abandoned private members’ bills, to title protection becoming government legislation and working with FSRA to flesh out the fine details.

Then LRA worked closely and intensively with The Institute and other Advocis business units in the credentialing recognition process.

We are not resting on our laurels. In Ontario, there is still much work to do as this is an entirely new framework. Regulators and other stakeholders lean on us heavily to determine the next phases of this project, including how to continually increase standards of professionalism over time and even how to unspool defunct credentialing bodies and credentials from the framework.

We continue to forge ahead in other provinces. In 2022, we responded to Saskatchewan’s Financial and Consumer Affairs Authority’s (FCAA) consultation on its proposed regulations of financial advisors and financial planners. In our submission, we supported the FCAA proposal to raise standards for the financial advisor title to align with a relationship-centric vision, rather than one based on product transactions. In addition, AGC staff met with regulators and government representatives in Saskatchewan and New Brunswick to express our policy views, our experience through the recognition process, and the lessons learned so far that could be of benefit in those provinces to improve their own title protection frameworks. We anticipate action in both Saskatchewan and New Brunswick in 2023.

The Voice of Canada’s Financial Advisors and Planners

Advocis continues to be the voice of Canada’s financial advisors and planners. In 2022, our voice was heard by regulators and other stakeholders across the country in the insurance, mutual fund and securities sectors. While the title protection file was our number one focus, we also dealt with a number of other issues. Written submissions in 2022 included the following:

Ontario Ministry of Finance: Capital Markets Act (February 18, 2022)

The Issue: The Government of Ontario published a draft Capital Markets Act to replace the Ontario Securities Act and modernize capital markets regulation. The draft functions as “platform legislation”, providing a framework where most operational requirements will be set out in the regulator’s rules.

Our View: Advocis believes that Ontario should introduce advisor incorporation, ensure independent contractors are protected from reprisals, include a more definitive list of unfair practices, and centre the focus on the advisor-client relationship throughout the CMA drafting process.

Joint Canadian Council of Insurance Regulators Consultation (CCIR) and Canadian Insurance Services Regulatory Organizations: Incentives Management Guidance (April 4, 2022)

The Issue: The Guidance aims to align incentive arrangements in insurance with the Fair Treatment of Customers Guidance.

Our View: The CCIR needs to be cognizant of the wide array of business models used to service consumers, the limited role of advisors in the design of incentive arrangements, the importance of ongoing service in insurance policies, the lack of a definition of “unfair outcomes”, and the need for more concrete examples of unacceptable incentive arrangements.

Joint Canadian Council of Insurance Regulators Consultation (CCIR) and Canadian Insurance Services Regulatory Organizations: Incentives Management Guidance (April 4, 2022)

(October 4, 2021)

The Issue: The Guidance aims to align incentive arrangements in insurance with the Fair Treatment of Customers Guidance.

Our View: The CCIR needs to be cognizant of the wide array of business models used to service consumers, the limited role of advisors in the design of incentive arrangements, the importance of ongoing service in insurance policies, the lack of a definition of “unfair outcomes”, and the need for more concrete examples of unacceptable incentive arrangements.

Canadian Securities Administrators (CSA) and CCIR: Total Cost Reporting for Investment Funds and Segregated Funds (July 27, 2022)

The Issue: The proposals aim to enhance and harmonize ongoing cost disclosure and product performance reporting for investment funds and segregated funds. Specifically, the proposals would require disclosure of ongoing embedded fees, such as management fund expense ratios and trading expense ratios.

Our View: We proposed simplified disclosure, argued that it is inappropriate to require dealers to independently verify the information provided to them by fund managers, and flagged uncertainty around the definition of “significant” costs in the segregated fund guidance.

14th Annual Regulatory Affairs Symposium

LRA delivers Symposium, an annual conference that provides a platform for financial advisors, industry experts, consumer advocates, regulators and politicians to debate and exchange perspectives on the key issues facing the sector.

After two years of hosting this event on a virtual platform, Advocis welcomed attendees in-person once again to its 14th edition on Tuesday, October 25 at the Ritz-Carlton Hotel in Toronto. Symposium 2022 featured two panels: one on securities regulation and another on insurance; various one-on-one fire-side chats discussing issues such as capital markets modernization, title protection, and technology and innovation.

Symposium 2022 also hosted special keynote speaker and football legend Michael ‘Pinball’ Clemons, and featured Ontario’s Minister of Finance, Peter Bethlenfalvy with Advocis Chair, Catherine Wood, in a one-on-one discussion.

With 300 registrations and a record high number of sponsorship dollars raised, Symposium was once again a tremendous success.

The Technology and Innovation Committee

LRA supports the Technology and Innovation Committee (TIC), a committee of technology-focused financial advisors who wish to share with their fellow Advocis members their enthusiasm and knowledge of technology and how it can integrate with and enhance advisors’ practices.

In 2022, the TIC became an official committee of the TFAAC Board. The TIC also welcomed three new members to the committee.

Throughout 2022, TIC members created valuable content for the association that demonstrated Advocis’ relevance in the fintech space. TIC members were featured in multiple webinars, podcasts and Chapter presentations, and one of TIC’s members authored an article for Advocis’ Financial Literacy Month campaign. The Chair of the TIC was also featured in the Symposium 2022 Technology and Innovation session.

The TIC continued to work on improving DigiCat 2.0 and preparing its next version. DigiCat is a catalogue of the key technological tools that TIC members find critical to their daily practices. DigiCat showcases “best in class” solutions in categories such as data security, client onboarding and client marketing. DigiCat 2.0 is an exclusive member benefit and available through the link on your dashboard.

More about the TIC is available at: www.advocis.ca/TIC