Uniform Planning Exam Being Readied in Canada

If you want to call yourself a financial planner in Canada, youre going to have to prove your worth.Under a proposed rule, stockbrokers, investment advisers, mutual fund salespeople and insurance reps who want to engage in planning will be required to pass a test measuring their basic financial knowledge and ability. The Ontario Securities Commission (OSC), Canadas largest regulator, is preparing

If you want to call yourself a financial planner in Canada, youre going to have to prove your worth.

Under a proposed rule, stockbrokers, investment advisers, mutual fund salespeople and insurance reps who want to engage in planning will be required to pass a test measuring their basic financial knowledge and ability. The Ontario Securities Commission (OSC), Canadas largest regulator, is preparing the rule on behalf of all provincial regulators except Quebec.

The proposal says that reps under the jurisdiction of any Canadian regulator must pass a test before they are allowed to offer financial planning advice to customers. The rule will be out for industry comment in early April.

The impetus for the creation of a common standard comes from OSC Chairman David Brown. For the past several months, Brown has brought together the heads of the key Canadian financial services trade groups, including the Canadian Bankers Association, the Investment Funds Institute of Canada, the Investment Dealers Association of Canada and the Canadian Association of Insurance and Financial Advisors.

Financial advisers come in so many guises these days that it makes sense to create basic standards that everyone must be able to pass, Brown says.

Because of the three-month comment period, the exam will not be available or required until sometime early next year, according to OSC officials. However, work on the exam is already under way with an outside consultant creating questions based on the input from the four industry groups. It will include sections on securities, tax, retirement and estate planning, life insurance, and basic economics.

Participants in the process say it is unclear whether those who already carry the Certified Financial Planner title will need to take the test. The Canadian Association of Financial Planners, a nonregulatory trade group, gives that designation.

Quebecois brokers and salespeople will be exempt from the test because that province already has strict financial planning rules.

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