The feedback referred to the Certified Financial Planning designation as if it were a license or a profession when sadly it is not. Not yet at least. It is a correspondence course that anyone can take, with no minimum requirements. It does not replace, improve, or over-rule the fact that nearly every single person calling themselves a CFP, CIM, or CF “anything” is being paid by sales commissions. An “eat what you kill” incentive plan. It might serve to mislead the public, however into believing otherwise and that unfortunately is the intent of some sellers. To mislead. To sell. (I must update this and apologize to members of the CFA, whom are the LEAST likely to be salespeople, have the LEAST amount of investment industry complaint on them, and require the GREATEST amount of professional training to obtain this CFA designation)
When I worked in the investment industry approximately 100% of persons selling financial products were legally licensed and registered in a category called “salesperson”. However this name was always cleverly hidden from the public using the many other names financial salesmen call themselves. Some call themselves planners, some advisors, some consultants. Zero called themselves what they were licensed as. Zero referred to themselves by how they were paid. The public should be asking government why this is allowed. All licensed salespersons found methods to avoid using the “saleperson” word. In some circles that is called misrepresentation. In my financial industry this is called “standard industry practice”. Call your MP and MLA and tell them this is no longer acceptable.
The fact that many industry people might have taken a course, titled Certified Financial Planning, or any one of a thousand such courses anyone can take, has little to do with their license, their practice or their behavior. I provided industry sales stats in my speaking presentation that show how most mutual funds are sold with the highest reward to the salesperson and the greatest penalty to the customer. This is not “advice”, nor is it planning. This is predatory selling under the clever disguise of giving advice. It is also against the law and every code of conduct and industry rule. Again, this is standard industry practice. Having a Certified Financial “anything” course does not change this reality. It just makes misleading the public into believing and parting with their money a bit easier. Many courses are simply used for marketing, to allow a salesman to proclaim a “sort of professional” status while operating totally as a commission product seller.
To mistake the name of a “course” for a “profession” and to begin calling oneself a “certified financial planner” when ones license with the government says something else, and ones compensation comes from commissions, is just one of many sleight of hand misrepresentations that my speech included that permits financial crime to pay so well. Using the same logic, should I be calling myself a Doctor, since I took a first aid course? The logic would be yes if we were talking about the investment industry. It would sell better.
Until members of the investment industry display an actual license on the wall in their office, the public will never know whether they are dealing with a salesperson, or a trusted professional advisor, or the brand new name given to nearly all 130,000 formerly licensed “salespersons” in Canada; “dealing representative”. Yes, the securities commission in your province cleverly and quietly just removed all reference to the word “salesperson” on Sept 29 of this year, and replaced it with “dealing representative”. I will let you think through the possible motivations of doing this, and while you are thinking this through, keep in mind that the salaries of each person at the provincial regulator are paid by fees charged to the industry they regulate, the investment industry.
Other developed countries have learned that one cannot both be a trusted professional advisor and a commission salesperson at the same time. Canada is a bit behind and is struggling to have it both ways as long as it possibly can. We have five major banks here who do over 90% of the investment business in the country and they very much enjoy the Canadian way of having your cake and eating it too.
Further info and background to this can be found at http://www.breachoftrust.ca as well as full video of the Southern Alberta Council speech titled “Making Financial Crime Pay” A How to Guide by a former industry insider.
Signed Larry Elford (formerly a Chartered Financial Planner, Certified Investment Manager, Fellow of the Canadian Securities Institute and Associate Portfolio Manager, now retired)