(June 6, 2003) It’s a simple question with many answers. To round out the second day of the Canadian Institute of Financial Planners (CIFPs) conference in Huntsville, Ontario, organizers put together a roundtable of key industry people to discuss the future of financial planning environment. The first question: What does “financial planner” mean to you?

The panelists — Ann Bowman, the Financial Planners Standards Council’s (FPSC) vice-president of communications and corporate relations; Julia Dublin, senior legal counsel of the Ontario Securities Commission (OSC); Michael Lem, chair of the FPSC and an advisor with BMO Nesbitt Burns; and David Richardson, vice-president of branch sales support with RBC Funds Inc. — each gave different answers, which captured the fragmentation the industry faces.

“From an [OSC] perspective, there really is no such thing,” said Dublin, noting that the OSC classifies an individual either as an advisor, exercising portfolio management, or a salesperson, selling products.

The first opposing view came from Ann Bowman, who noted that the FPSC would define a financial planner in three ways. “First of all, we believe that a financial planner should be someone who has achieved the CFP designation,” she said. But Bowman also mentioned two other noteworthy definitions — one from planners themselves and one from what Canadians think a financial planner should be.

The FPSC is in the process of asking financial planners what they think they need to know to serve their clients, and this “redefining of the CFP planner” will get translated into the curriculum. In addition, the FPSC conducted third-party market research to find out what consumers think a financial planner is. “Our preliminary results are coming in and investors expect [financial planners] to find a realistic way to look at their goals and a reasonable approach for how they will be achieved,” she said, though she admitted, Canadians defined financial planners as “anybody who they go to who ends up helping them with their personal finances.”

Richardson had a slightly different take. At RBC, he works closely with RBC’s licenced sales force. “What we’ve done within the bank is create a financial planning arm,” he explained, consisting of about 1,700 people who have the “background and training specifically to provide financial planning services.” He says the overall sales group is quite different from the financial planners. “Financial planners are expected to build relationships with the clients they serve.”

As for Lem, his definition of a financial planner was “someone who provides the client a map of where they are, where they could be and how to get there. Everything else is just a piece of the puzzle,” said Lem.

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    • Whatever the definition, Bowman pointed out the need for superior advice. “Consumers know that there are more products, more complex products out there,” she said. “They understand that there are a whole host of people who want to help them or supposedly want to help them. They also know they aren’t savvy enough to handle their financial affairs themselves.”

    Panel moderator John Murray, IFIC’s vice-president of corporate affairs and general counsel, acknowledged the disconnect between what Canadians need from a financial planner and regulation. He asked Bowman, Richardson and Lem to tell Dublin and the OSC what they believed financial planners wanted from the regulators.

    “I think the thing planners want the most from regulators is confidence and to show the public their confidence,” said Lem. “As planners, we want to offer our clients the best service and do the right thing. I get the perception from the regulators that advisors and brokers aren’t the most honest people.”

    Bowman agreed. “Financial planners want regulators to recognize that they have their clients’ best interests in mind at all times,” she said. “They want a clear definition for the Canadian public about who is and is not qualified to meet the client’s expectations as a financial planner.” CFPs have also told the FPSC that they want stricter regulations, rules and standards.

    Richardson added that he believes financial planners want a transparent system “without the ifs, ands or buts.” “The regulators should work with us to create that system,” he said.

    The OSC has been seeking comments on its fair dealing model now posted on the commission’s Web site. The panel discussion wrapped up the second and final day of the CIFPs conference.

    Filed by Jennifer McLaughlin, Advisor’s Edge, jmclaughlin@rmpublishing.com.

    (06/06/03)