: Hub Financial Inc. - Submission

August 27, 2015

Delivered By Email

Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives
c/o Frost Building North, Room 458
4th Floor, 95 Grosvenor Street
Toronto, Ontario M7 A 1Zl

Dear Sirs:

Re: Consultation on Financial Advisory and Financial Planning Policy Alternatives

We thank you for the opportunity to comment with respect to the Consultation on Financial Advisory and Financial Planning Policy Alternatives initiative.

HUB Financial Inc. (HUB) is one of Canada's leading Managing General Agencies(" MGAs") and Hub Capital Inc. (HUB) is our mutual dealer that is a member of the Mutual Fund Dealers Association of Canada ("MFDA"). We have 16 regional offices located from coast-to-coast through which we support more than 5,000 financial advisors and insurance brokers and manage in excess of $5 billion of client assets. In both our MGA and MFDA dealer channels, a large number of our advisors are dually licensed for the sale of insurance and investment products and we play a distinct and significant role in providing access to products, training, systems, tools, oversight and administrative services.

Hub is committed to a harmonized approach to improving upon market conduct standards in Canada and supports that every Canadian should expect that anyone holding themselves out as a financial planner is qualified, competent, accountable and subject to oversight for the advice being provided. We are concerned however, that any proposed regulation of financial planning activities, rather than the title of Financial Planner, may limit the ability of an investment or insurance advisor to conduct important activities with their clients such as needs analysis, retirement, tax and/or estate planning.

1. What activities are within the scope of financial planning? Is the provision of financial advice different from financial planning?

We agree with the description put forth by the Financial Planning Standards Council (FPSC) and the lnstitut québécois de planification financière (IQPF), that financial planning varies in scope and complexity ranging from planning advice that is straightforward and narrow, requiring limited integration across financial planning areas to those engagements that are complex and involved, requiring extensive integration across financial planning areas.

The activities that fall within the scope of financial planning include various levels of attention on Financial Management, Insurance and Risk Management, Investment Planning, Retirement Planning, Tax Planning, Estate Planning and Legal Aspects.

2. Is the current regulatory scheme governing those who engage in financial planning and/or the giving of financial advice adequate?

Financial planning and advice may be provided by an individual holding themselves out as a financial planning professional who may, or may not, be a member of a professional organization that establishes and maintain standards for the financial planning profession in Canada. It may also be provided by advisors in support of the product and services they offer that are otherwise regulated under their insurance and/or securities registrations.

There is a gap in the current regulatory oversight of financial planning and those holding themselves out as financial planners and are not ultimately under the oversight of the Ontario Securities Commission ("OSC") or the Financial Services Commission of Ontario ("FSCO"). We urge the Committee consider a model directed to providing oversight to those individuals not otherwise regulated and discourage any regulatory framework that would create additional burden to advisors and firms whose activities are regulated through other channels.

3. What legal standard(s) should govern conflicts of interest and potential conflicts of interest that may arise in financial planning and the giving of financial advice?

The legal standards of the ultimate regulatory body should govern conflicts and potential conflicts of interest through the application of rules and standards for identifying, disclosing and managing conflict issues that may arise. We suggest that the OSC, MFDA and/or II ROC govern conflicts for investment advisors, FSCO govern insurance agents and the new Financial Planning Authority (FPA) govern financial planners not otherwise regulated.

4. To what extent, if at all, should the activities of those who engage in financial planning and/or giving financial advice be further regulated? Please consider the following in your response:

  1. Licensing and registration requirements;
  2. Education, training and ethical responsibilities;
  3. Titles and designations of individuals who engage in financial planning and/or the giving of financial advice;
  4. Specific activities that should be included or excluded in a regulatory scheme;
  5. Costs and other burdens of regulation;
  6. Regulation of compensation; and
  7. Complaints and discipline mechanisms.

Investors should be confident in that the financial advice they receive is provided by advisors that are qualified, competent, accountable and subject to oversight and disciplinary mechanisms. It is also important to stakeholders in the industry that the regulatory landscape be as harmonized as possible, both provincially and nationally, be mindful of regulatory burden and bring consistency to the cost of regulation and compensation practices, bearing in mind the differences in the nature of the products sold or services rendered.

5. What harm(s) and/or benefit(s) do consumers experience in the current environment? Please provide specific evidence to support your views where available.

Under the current environment, most consumers are well served by financial advisors and professionals providing various levels of financial advice. The lack of regulatory framework however, leaves a significant gap in protecting the public interest and the potential of receiving poor advice from individuals that are not proficient, accountable or subject to oversight that could ultimately have a profound impact on the ability of an individual to achieve their financial, retirement and /or estate planning goals.

6. Should consumers have access to a central registry of information regarding individuals and entities that engage in financial planning and the giving of financial advice including their complaint or discipline history?

A central registry of information regarding individuals and entities that engage in financial planning and the giving of financial advice should be made available to ensure the public is able to make informed decisions when choosing a financial advisor. The securities and insurance sectors already have these registries in place, including discipline history. We would caution against including the complaint history as some complaints are unfounded and there are existing mechanisms within the regulatory environment to address serious complaints or complaint histories through the disciplinary process.


The quality of financial advice and financial planning is crucial to consumers and we support a harmonized regulatory framework for those that are already regulated and one that will provide oversight to individuals and firms that are not currently regulated.

We would welcome the opportunity to discuss this with you and invite you to contact the undersigned.

Yours truly,
HUB Financial Inc.
HUB Capital Inc.

Terri Botosan