Q & A #1: CSI's new Wealth Management Essentials course
Q: Will the new Wealth Management Essentials course offered by CSI qualify as a prerequisite for the CFP Examination?
A: In July 2006, the Investment Dealers Association (IDA) mandated the Wealth Management Essentials (WME) course as the only course that they will now accept to meet the 30-month requirement for registered representatives of the IDA. Previous to this, a registered representative could have completed CSI's Professional Financial Planning Course (PFPC) or Investment Management Techniques (IMT) to meet the 30-month requirement.
This confused some CFP candidates who automatically assumed FPSC would incorporate the WME into CSI's accredited path to the CFP Examination. Since the WME does not contain as much "financial planning curriculum" as the PFPC, it didn't meet FPSC's requirements. So despite the launch of the WME, the only CSI path leading to eligibility for the CFP Examination was:
CSC
PFPC
This has now changed. CSI has created an additional course called the WME - Financial Planning Supplement, which effectively fills in the gaps with respect to the "financial planning curriculum" that the WME is lacking. We will now accept the following as an accredited path to the CFP Examination through CSI:
CSC
WME
WME - Financial Planning Supplement
This will allow potential candidates who are licensed representatives of the IDA to have a "path to the CFP" as they meet their 30-month requirement. Both streams will continue to qualify and according to CSI, they currently have no intention of discontinuing the PFPC. There is a misconception out there that, since the PFPC is no longer "accepted for IDA purposes," it is no longer acceptable for FPSC or that it is "outdated." CSI has committed to supporting the PFPC until at least 2008/2009.
Q & A #2: Fee-for-service in Alberta
Q: Can CFP professionals who work for IDA member firms in the province of Alberta offer fee-for-service financial planning?
A: There is no written or formal rule published by the IDA that prohibits the offering of fee-for-service financial planning by individuals who are employed at IDA member firms. The only written policies on this issue (MR Notice 0239 and MR 0241, issued in 2003) explain that any fee for service activity has to be done through the supervision of the IDA member firm. Therefore, employees of IDA member firms offer fee-for-service financial planning at the discretion of their employers.
Q & A #3: How might the changes to IDA licensing requirement affect me?
Q: IDA's licensing requirements have changed. How will these changes have an effect on me as a CFP professional.
A: IDA's licensing requirements have changed and the changes could have an effect on some current and future CFP professionals.
Effective July 4, 2006, the Wealth Management Essentials course (WME) replaces the CSI's Professional Financial Planning course (PFPC) and the Investment Management Techniques course (IMT) as the course required to fulfill the IDA's 30-month post-approval requirement.
The following will help you assess your own situation and is relevant only to those who work for or will be working for IDA firms.
What happens if I am a current CFP professional who completed the CFP education program requirement prior to July 4/06 through the Canadian Securities Institute (CSI)?
If you are a current CFP professional who completed your education to qualify for the CFP Examination through CSI , you don't have to do any more courses. You just apply to have the Personal Financial Planning Course (PFPC) recognized by the IDA for your 30-month requirement.
What happens if I am a current CFP professional who completed the CFP education program requirement through one of the other FPSC-accredited education providers and completed all requirements for CFP credential prior to July 4, 2006?
If you are a current CFP professional who completed your education to qualify for the CFP Examination through one of the other accredited education providers (CIFP, ICB, Advocis or university/college program) you can apply to the IDA for an exemption (by virtue of your CFP designation) from taking any courses to complete your 30-month requirement.
What happens if I am a current CFP professional who completed the CFP education program requirement through the Approved Prior Credentials Policy and completed all requirements for CFP credential prior to July 4, 2006?
If you are a current CFP professional who was eligible for the CFP Examination though the Approved Prior Credentials Policy (have one of the following degrees/credentials - CA, CGA, CMA, CFA, CLU, Members of provincial law societies, PhDs in finance, business or economics), you can apply to the IDA for an exemption (by virtue of your CFP designation) from taking any courses to complete your 30-month requirement.
What happens if I am a CFP candidate (not through CSI) who wrote the CFP Examination prior to July 4/06?
As long as you were registered to write the CFP Examination prior to July 4, 2006 and you complete all of the requirements for CFP professional prior to your IDA deadline, you may apply for exemption (by virtue of your CFP designation) from taking any courses to complete your 30-month requirement. If you do not meet all requirements for the CFP credential prior to your IDA deadline, once you earn your CFP credential, you can apply for exemption from Module 1 (Financial Planning) of the WME.
What happens if I am a student enrolled in CFP program (not through CSI) but not registered for CFP Examination yet?
Since you were not registered for the CFP Examination prior to July 4, 2006, you are required to complete your 30-month requirement by taking the WME. But if you successfully complete the CFP Examination, you will be exempt from the first module of the WME, Financial Planning.
What happens if I am currently IDA-approved in the category of Registered Representative (RR) as of the July 4, 2006 effective date, but have not yet completed the post-licensing requirement? I enrolled in the PFPC prior to July 4, 2006.
You may complete either the PFPC or the WME to fulfill your 30-month requirement. But please note that individuals in this situation who fail to complete the PFPC within two years of course enrolment must complete the WME to satisfy the post-licensing requirement.
Individuals who have not yet received IDA approval but who enrolled in either the PFPC prior to July 4, 2006, will be able to use the enrolled course to fulfill the 30-month requirement, provided they are able to complete the course within two years of enrolment.
Individuals who have not yet received approval but who have completed either the PFPC prior to July 4, 2006, will be able to use it to fulfill the 30 month requirement if they become approved as Registered Representatives within two years of completion.
Does CSI's new WME, which replaces the PFPC and IMT, meet the academic prerequisites to write the CFP Examination?
Wealth Management Essentials (WME) replaces the PFPC as a course that can meet the IDA's 30-month rule for Registered Representatives. Therefore, if you were previously planning to take the PFPC to meet the IDA requirement, the WME is now the requirement (effective July 4, 2006). The WME contains some modules from the PFPC (relating to financial planning) and some modules from Investment Management Techniques (IMT) and some new modules that bring both these topic areas together.
Totally separate from the IDA requirements, the accredited educational programs that can give you eligibility for the CFP Examination are programs that cover, in appropriate depth, all topics of the CFP Examination Syllabus. The current path to the CFP Examination offered by CSI is a program that requires completion of BOTH:
Canadian Securities Course (CSC); and
Professional Financial Planning Course (PFPC).
The introduction of the WME does not change this eligibility requirement for the CFP Examination at this point. Also, the WME (in and of itself) will not meet the educational requirements of FPSC as it has less content relating to personal financial planning than the PFPC contained.
Q & A #4: Membership requirement for CFP professionals?
Q: Is membership in an association such as Advocis or CIFPs a requirement of holding the CFP designation?
A: No, membership in associations such as Advocis or CIFPs is not a CFP licensing requirement.
FPSC is not a membership organization. FPSC is a standard setting professional organization with the mission to benefit the public and the financial planning profession by establishing and enforcing the highest standards in education, examination, experience and ethics for financial planners who hold the Certified Financial Planner (CFP) designation. FPSC is committed to educating the public as to the significance of the CFP as the highest standard in financial planning recognized by all segments of the financial services industry and around the world. Individuals licensed to use the CFP marks in Canada represent the standards in professionalism set and promoted by FPSC.
Membership organizations promote and lobby on behalf of their members and the industries they represent. FPSC promotes and lobbies for national, cross-sector and consumer recognition of the standards set by the CFP certification process. Our goals are not mutually exclusive, and the benefactors of our co-operative and synergistic efforts should be the professional planning community and the Canadian public.
FPSC recognizes the many benefits a membership organization can offer you. Associations offer collegial networking and continuing education opportunities that can benefit your development as a financial planning professional. FPSC welcomes the emergence of membership organizations that, while supporting the Council's goals, provide services that are useful to CFP professionals who choose to avail themselves of them. But, FPSC will not make membership in these organizations a requirement of CFP licensing.
Q & A #5: Filling out the "General Profile" on Licence Renewals?
Q: What constitutes a "practicing financial planner" in question # 9 of the General Profile questionnaire.
A:An individual engaged in offering any financial planning related services as part of their professional activities is considered a "practising financial planner" for the purpose of this questionnaire. We ask this question only to deter individuals who are not practicing in any way (e.g. educators, retirees) from attempting to answer the following questions that would not be applicable to their circumstances.
Q & A #6: Why isn't the CFP designation recognized in Quebec?
Q: I currently hold the CFP designation and work as a financial planner dealing with clients in Ontario and Quebec. We were advised that only advisors with IQPF qualifications can develop and present a full financial plan on their own for residents in Quebec. Without the IQPF qualifications, an advisor would have to have the full financial plan reviewed and approved by an IQPF Designate and the Designate would have to participate (in person or by telephone) in the presentation to the client.
Obviously, with the CFP mark being an internationally recognized designation, I cannot comprehend why there is need for further qualifications to practice as a financial planner in the province of Quebec. I would appreciate if you could provide some clarification with respect to the provincial regulations and what, if anything, we can do to be grandfathered, as CFP professionals, from these requirements.
A:The regulation in Quebec governing the offering of financial planning services is Bill 188 and can be viewed at http://www.bsf-qc.com/anglais/index2.htm. Unfortunately as it is currently written, all individuals holding out as financial planners in Quebec or servicing Quebec residents must BE AUTHORIZED TO DO SO BY the Bureau des services financiers and use the title "financial planner" or "F. PL" ONLY. This regulation came into effect very abruptly in 2000.
Financial Planners Standards Council recognizes the gravity of this problem for individuals whom have earned the CFP designation in good faith, believing you could use the trademarks to identify yourself as a professional anywhere in Canada. However, FPSC was not aware that Quebec was considering this change in their regulation when we were formed. We have and will continue to attempt to negotiate a reciprocal "equivalency" arrangement between the two designations. We are hopeful, as residents in Quebec are equally desirous of using the CFP in their province as those CFP professionals outside Quebec are of being recognized in Quebec. Currently, though, all those offering financial planning services in Quebec are legally obligated to abide by Bill 188.
Q & A #7: Fee-based Financial Planning in Alberta?
Q: I have been told that the selling of products by planners who also did fee-based planning was not allowed in Alberta. Is that still the case?
A:In the past, the Alberta Securities Commision has taken the position that registered sales representatives could not charge a fee for financial planning. With a self-regulatory organization with adequate resources devoted to compliance to address their concerns, they will not object to a registered sales representative receiving a fee for financial planning provided that:
The dealer is a member of the Mutual Fund Dealers Association of Canada;
The dealer is aware the sales representative is providing the service and does not object;
The dealer has access to the financial plans prepared by the sales representative for clients;
The dealer notifies the Commission that the sales representative is providing the service (in most cases this will be a change to information previously disclosed to the Commission with respect to other business or employment);
If the service representative is being provided by the dealer, the dealer must supervise the sales representative with respect to this activity and all compensation must be paid through the dealer;
If the service is not being provided by the dealer, the sales representative must provide the service through another entity that is regulated by a government authority or statutory agency or subject to the rules and regulations of a widely-recognized professional association, pursuant to the Mutual Fund Dealers Association Rules 1.2.1(d). In addition the sales representative must provide disclosureto the client in writing that:
the dealer is not providing the fee-based planning service;
the dealer will not be supervising the sales representative who is providing the financial planning service and the client should not rely on the dealer for any review of the service; and
the dealer will not be liable to the client for any errors or omissions.
Please note that is up the each dealer to decide whether to permit its sales representatives to carry out fee-based planning.
Q & A #8: Disclaimer required for teaching in a CFP Program?
Q: Does FPSC have a recommendation for a disclaimer statement for use in the instance where a CFP professional is asked to teach "personal finance" to college students? There is no fund sales or planning fees associated with the undertaking. I am concerned that if a student took information or partial information from the course and acted with resultant losses, I could be held to the higher standard and could face a claim.
A:FPSC would consider your fiduciary duty in giving "advice" to students no different than the duty you would have to a client, irrespective of whether or not you were licensed to sell securities.
As a CFP professional, you are bound by the CFP Code of Ethics, whether you are in the classroom or with a client. That is, you are held to the seven principles embodied in the Code of Ethics, one of which is competence.
Teaching personal finance to students would not in any way suggest a higher standard than providing financial planning advice to a client. None of information or partial information that you may give that would result in a loss to a student. As a CFP professional, you are not qualified to give advice about specific stocks or other securities. If however, for example you gave entirely wrong information on topics covered by the CFP Examination Syllabus, and a student chose to complain to FPSC about such information, FPSC may choose to investigate the complaint and you would be judged accordingly against the standards established in the CFP Code of Ethics.
No disclaimer statement would be able to absolve you of your duty to adhere to the CFP Code of Ethics or your any possible repercussions for violation of the Code.
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CFP®, CERTIFIED FINANCIAL PLANNER® and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). Financial Planners Standards Council is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB.
are certification marks