: Rogers Group Financial - Submission

VIA EMAIL
Expert Committee to Consider Financial Advisory and
Financial Planning Alternatives
c/o Frost Building North, Room 458
4th Floor, 95 Grosvenor Street
Toronto ON M?A 1Z1

Sent via email: Fin.Adv.Pin@ontario.ca

June 17, 2016

Dear Expert Committee:

Re: Preliminary Policy Recommendations of the Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives (the " Preliminary Recommendations")

Rogers Group Financial ("RGF") is a financial planning organization located in Vancouver, British Columbia. We have both an investment dealer and life agency. All of our financial advisors are dually licensed for securities and insurance, provid ing financial planning and implementation to our clients.

We appreciate the opportunity to provide input to the Expert Committee on its Prel iminary Recommendations for reforms in the regulation of financial planning. We serve some cl ients in Ontario and are keenly interested in consistent regulation across Canada.

1. Regulation of Financial Planning in Ontario

Expert Committee's Recommendations:

  1. Regulation should be required of any individual who or firm that provides Financial Planning services either expressly or implicitly through Holding Out by way of titles, described services or otherwise;
  2. Individuals who and firms that provide Financial Planning and whose Financial Product Sales and Advice activities are regulated by the existing regulatory framework for securities, insurance and mortgage brokering should have any associated Financial Planning activities regulated by their existing regulator or regulators for those who have more than one licence; and
  3. Individuals or firms performing Financial Planning activities outlined in the current regulatory framework should have their Financial Planning activities regulated by the proposed Financial Services Regulatory Authority (FSRA).

As outlined in our previous submission to the Ontario government dated January 31, 2014, RGF supports clarity and standardization for the provision and supervision of financial planning in the industry.

We recognize that there are individuals who may hold themselves out as financial planners but may not have the necessary proficiency requirements and appropriate oversight. It is imperative to ensure that those involved in delivering financial plans and financial planning have the necessary proficiency and can understand and apply the minimum acceptable standards.

There should be regulation that results in agreed upon standards of what constitutes a financial plan, the credentials of the individuals delivering the financial plan, and the oversight of recognized financial planners. We support a requirement that any individual using a recognized financial planning title and/or holding themselves out as a financial planner and/or providing financial plans for clients be subject to the jurisdiction of a self-regulatory organization.

We appreciate the Expert Committee's consideration about not adding to the many layers and multiple regulatory bodies we already are supervised by and report to. However, in that a separate regulatory body will be required to oversee financial planners not presently a registrant with an existing SRO, we favour the opportunity to align our support for financial planning oversight to be aligned with this separate "financial planning" SRO.

We believe that the regulation of product and advice-for-product, does not have the scope for overseeing comprehensive financial planning. While there should be an alignment of objectives among the various regulators, multi-licensed firms should have the ability to choose the SRO for financial planning oversight best suited to their business model.

2. Harmonization of Standards

Expert Committee's Recommendation: We recommend that the education, training, credentialing and licensing of individuals engaged in the provision of Financial Planning be harmonized and subject to one universal set of regulatory standards.

Our investment dealer, Rogers Group Investment Advisors Ltd., is a member of the securities SRO - IIROC. IIROC has strict proficiency and regulatory requirements, including rigorous entrance requirements, training and ongoing continuing education. However, with respect to financial planning, which is broader than the securities advice and products mandate of II ROC, we do not believe II ROC is an entity proficient and experienced in establishing the criteria for a financial plan, the definition of a financial plan and financial planner.

We appreciate the Expert Committee's recognition that cooperation among SROs is a must. We strongly suggest that the leading organization in Canada for the development and professionalism of financial planning is the Financial Planning Standards Council. The FPSC has set stringent standards to qualify and to deliver financial plans and planning to Canadians - embodied through the internationally recognized designation of the CFP - Certified Financial Planner. We recommend the adoption of the already established Canadian Financial Planning Definitions, Standards & Competencies. In addition, the FPSC through its work in the Coalition on Financial Planning has actively sought cooperation with other national financial planning organizations such as the IQPF. In May 2016, the FPSC and the Insurance Council of British Columbia signed a Memorandum of Understanding to strengthen each organization's enforcement processes and oversight. This demonstration of cooperation enables both organizations to leverage their respective expertise in order to best serve the public interest. We believe this is a model for success in harmonizing standards in the provision of Financial Planning for Canadians, not just Ontarians.

3. Statutory Best Interest Duty and;

4. Exemptions from Statutory Best Interest Duty

Expert Committee's Recommendation: We recommend that a Statutory Best Interest Duty (SBID) be adopted and applied to all individuals who and firms that provide Financial Product Sales and Advice and/or Financial Planning in Ontario. This SBID should be based on a uniform and codified standard of care.

We can best summarize our view with that of the BC Securities Commission, that proposed targeted reforms, followed through with coordinated and focused compliance and enforcement efforts, and full realization of the Client Relationship Model (CRM2)and Point of Sale initiatives will achieve the best outcomes for investors and advance the best interest of investors.

In addition, we encourage the Expert Committee to wait on the work being done by industry groups to respond to the CSA Consultation paper 33-404 Proposals to Enhance the Obligations of Advisors, Dealers and Representatives Towards Their Clients.

5. Referral Arrangements

Expert Committee's Recommendation: We recommend that no individual who or firm that provides Financial Product Sales and Advice or Financial Planning be permitted to pay a referral fee to a third party for the referral of a customer or prospective customer who is be to provided with Financial Planning or Financial Product Sales and Advice, unless the other person or firm receiving the referral fee is regulated as a provider of Financial Product Sales and Advice or Financial Planning and owes a best interest duty to consumers.

We believe that the Expert Committee's concern about payment of a referral fee only to those that are regulated as a provider of financial product sales and advice or Financial Planning, and owes a best interest duty to consumers is valid. Full transparency with respect to the referral arrangement, including compensation, is a must.

We are currently subject to both National Instrument 31-1-3 Registration Requirements, which provides direction regarding Referral Arrangements and Insurance Council of BC requirements for referral arrangements.

The committee's recommendations extend beyond those rules. Those rules are sufficient for regulated people. For those not subject to licensing requirements, the rules should be comparable to those bodies rules and not exceed them or incorporate a subject to best intent rule.

6. Titles and Holding Out

Expert Committee's Recommendation: We recommend that the use of titles by individuals and firms engaged in the provision of financial Product Sales and Advice and/or Financial Planning be prescribed in order to reduce consumer confusion.

We support the need to clarify titles and holding out by advisors and planners. To that end, speaking first to titles and holding out regarding Financial Product Sales and Advice, proposed targeted reforms are being contemplated in the CSA Consultation Paper proposing amendments that would more strictly regulate client-facing business titles for individuals. We encourage the Expert Committee to wait on the outcomes of this work.

With regard to the title and holding out as a Financial Planner, we support a requirement that any individual delivering or holding out as a "financial planner", have a recognized financial planning designation and be subject to the jurisdiction of a self-regulatory organization or regulatory organization.

7. Central Registry

Expert Committee's Recommendation: We recommend that a single, free, comprehensive central registry be created and maintained, with adequate resources to provide a one-stop shop of information for consumers regarding the licensing and registration status, credentials and disciplinary history of individuals who and firms that provide Financial Product Sales and Advice and/or Financial Planning to Ontarians.

We support a single, free, comprehensive central registry to provide a "one-stop" source of information for consumers. However, this registry should·be national in nature and not add to the regulatory burden.

8. Financial Literacy and Investor Education

Expert Committee's Recommendation: We recommend that financial literacy and investor education of Ontarians be supported and actively encouraged in Ontario by government, regulators, public and private schools (through their respective curriculum bodies and school boards), non-profit organizations and the financial services industry.

We support the Expert Committee's call for support by government, regulators, public and private schools, non-profit organizations and the financial services industry.

9. Issues for Further Consideration - simplified complaint and restitution mechanisms, investigation and prosecution/adjudication of complaints, consumer-friendly process for recovery of financial losses by consumers

Expert Committee's Recommendations: We recommend that the Government of Ontario give further consideration to the following issues which we highlight yet fall outside our mandate:

  1. The need for simplified complaint and restitution mechanisms for consumers of Financial Planning and Financial Product Sales and Advice
  2. A simplified approach to the investigation, prosecution and adjudication of consumer complaints related to regulatory offences in the provision of Financial Planning and Financial Product Sales and Advice;
  3. A consumer-friendly process for recovery of financial losses by consumers

We agreed that standardization and simplification of these processes is necessary. We encourage the Expert Committee to consult with governments and regulators across Canada, and work towards a Canada-wide regulatory framework.

We would be pleased to meet with the Expert Committee to respond to any questions you may have.

Sincerely,

ROGERS GROUP FINANCIAL

Clay Gillespie, BBA, CIM, CFP, FCSA
Managing Director