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The Investment Industry Regulatory Organization of Canada is urging the industry to review the titles and designations they use “and consider how they may be interpreted by investors,” Paul Riccardi, senior vice president, enforcement, member policy & registration, told the Star in an email.
Commonly used business titles include advisor, financial advisor, investment advisor, financial planner, wealth advisor, and investment associate. In some cases, advisors also use titles that indicate their function in the firm, such as senior vice president.
“Many of these business titles do not, on their own provide a meaningful description of the type of services and/or investment products that a licensed representative can offer to a client,” IIROC said in its guidelines.
The requirements to earn and maintain these financial designations vary greatly, IIROC said. Some professional designations take years of work or classroom study, while others can be obtained after a weekend seminar or through online self-study.
“Simply put, the criteria to obtain and maintain these various financial designations vary widely. We also found that very few firms provide clients with any explanation of what these financial designations mean in practice,” IIROC said.
IIROC’s research on how investors are influenced by business titles was mixed, with some indicating they were important and others viewing them with skepticism.
The firms should also provide a clear explanation of the title, corresponding proficiencies, and industry licensing requirements, IIROC said.
Investment industry firms regulated by IIROC will have until March 9 to comment on the draft guidance.