Financial Advisor versus Financial Planner
Most people generally understand what a doctor, lawyer or engineer is and when they might likely need one. When a consumer needs financial advice, should they go to a “financial adviser” or “financial planner”? My industry is still working on that issue after 20 years.
I started in financial services in the year 2000 with the title “account executive”. It wasn’t an industry title, it was something they could attach to someone new who had come into the business but did not have any financial accreditation. I found the title confusing not only for me, but potential clients too. Because we were actually doing financial plans, it became obvious within a few months that I needed to become a CFP, Certified Financial Planner. Back then, there seemed to be little regulation as to what a “financial adviser” or “financial planner” actually was. While I first took the “mutual fund” and “life licensing” courses to meet the legal requirements to be able to offer the sale of mutual funds or life insurance products, they covered very little about financial planning.
I quickly learned that the CFP was really the only way to get to a higher recognized level of training that would actually help clients develop, implement and monitor a financial plan. Over the following three years, I took the six required courses and completed the CFP exams in mid 2003. These courses covered six areas such as financial management, investment management, retirement planning, risk management, tax planning and estate planning. I continued to notice that the industry was spending a lot of time getting feedback and who could be called a “financial adviser” or “financial planner” and a host of other names that really confused the consumer greatly.
So after 20 years, it seems little has changed. There continue to be endless debates and timelines for various government parties and regulatory bodies who continually do studies and make recommendations on who can use the title “financial adviser” or “financial planner”. The current provincial government was the latest to take up this activity again but when I read the latest article referenced below, it seems as murky as ever.
They also haven’t answered another key question here which applies to me and the other CFPs in Ontario. What’s the difference between a “financial planner” and a “Certified Financial Planner”. If I’m confused, I’m sure consumers are too. Maybe things will be simpler for the consumer to figure out sometime in the future, maybe not, but I’ll just keep watching.
Reference article, “Ontario’s title reform could miss the mark”.