DELIVERED VIA June 19, 2018

Transcription

1 DELIVERED VIA June 19, 2018 Ms. Paige Ward General Counsel, Corporate Secretary and Vice-President, Policy Mutual Fund Dealers Association of Canada 121 King St. West, Suite 1000 Toronto, Ontario M5H 3T9 Dear Ms. Ward: RE: COMMENT LETTER ON PROPOSED MFDA RULES 1.2 (DEFINITIONS) AND (CONTINUING EDUCATION) AND MFDA POLICY # 9 (CONTINUING EDUCATION (CE) REQUIREMENTS FOR APPROVED PERSONS OF MFDA MEMBERS) Thank you for your request for comment letters regarding this important consumer protection initiative to ensure Approved Persons of the Mutual Fund Dealers Association of Canada (MFDA) meet ongoing continuing education requirements. On behalf of its over 10,000 members, The Canadian Institute of Financial Planners (CIFPs) is pleased to provide you with this submission commenting on the above-noted issues, which are very important to its members. Further, our affiliate educational organization, The Canadian Institute of Financial Planning (CIFP) is pleased to represent the views of its 7,000 + students. We appreciate being asked to provide you with our views. CIFPs is the professional association for financial planners in Canada. Many of the members of CIFPs hold the CERTIFIED FINANCIAL PLANNER designation, which is the designation granted by Financial Planning Standards Council (FPSC) to individuals who have met its educational standards, passed the FPSC CERTIFIED FINANCIAL PLANNER Examinations, satisfied work experience requirements and agreed to abide by the FPSC Code of Ethics. CIFPs provides its members with continuing education through courses and conferences, practitioner support services, including mentoring, best practices and technical publications, regulatory support, and advocacy services on issues that have the potential to impact financial planners. All members of CIFPs subscribe to the CIFPs Code of Conduct and Ethics. As financial planners, the members of CIFPs include individuals registered as dealing representatives who are agents of firms registered as mutual fund dealers (members of the Mutual Fund Dealers Association of Canada) or as investment dealers (members of the PAGE 1 OF 6

2 Investment Industry Regulatory Organization of Canada). CIFPs members can also be licensed insurance agents and many members are duly licensed as securities dealing representatives and as insurance agents. Our members operate in all provinces and territories of Canada, and individual members are registered and licensed in each of the provinces and territories where they work with clients residing in those provinces and territories. CIFP has been involved in the delivery of high quality financial planning education to Canadian financial planners since Currently, CIFP offers educational programs in financial planning and retirement planning and delivers customized financial education and training programs to many organizations in the financial services industry. Additionally, CIFP through its CIFP Retirement Institute is the licensing body for the Registered Retirement Consultant (RRC ) and Registered Financial & Retirement Advisor (RFRA ) designations. These designations are supported by a rigorous educational program of study and examination, work experience, annual continuing education, code of conduct & ethics, and standards of practice. Almost 4,800 RRC holders are currently licensed to provide the pre- and post-retirement and lifestyle planning needs of Canadians. With over 4,000 students currently registered in the RRC program, CIFP expects over 8,000 RRC holders serving Canadians within the next 18 months. CIFPs and CIFP s strong focus and commitment to high standards of practice and education will guide and shape our comments to your questions in our submission. Our enclosed comment letter emphasizes the need for high-quality CE activities and CE content providers and the need for a streamlined, efficient and cost-effective delivery and management system for the proposed CE program. ***** Thank you for considering our comments. Please contact Keith Costello, the President and Chief Executive Officer of CIFPs at (647) or kcostello@cifps.ca if you have any questions about our comments or you would like to meet with us to discuss them further. We would be very pleased to meet with you and hope that you will include us in any further discussions or consultations that you decide to undertake. Yours very truly, Keith Costello, BADM, MBA-Strategic Planning President & Chief Executive Officer PAGE 2 OF 6

3 OVERVIEW The Canadian Institute of Financial Planning commends the MFDA for its commitment to establishing continuing education requirements for MFDA members and their Approved Persons. In principle, CIFP is in agreement with the recommendations made by the MFDA and believes the initiatives brought forward will achieve its objective of assisting Approved Persons of MFDA members to keep their industry knowledge current and to maintain a high standard of professionalism. Most importantly, the clients they serve will benefit from this professional development program this is worthy of industry support. CIFP would like to offer its perspective on the proposed new MFDA rules 1.2 (Definitions) and (Continuing Education) and the proposed new MFDA Policy # 9 (Continuing Education (CE) Requirements for Approved Persons of MFDA Members) and related matters not as a critique but, with a view of bolstering the efficacy of the CE program. PROPOSED NEW MFDA RULE 1.2 (DEFINITIONS) The Canadian Institute of Financial Planning is comfortable with the definitions as presented under Rule 1.2. PROPOSED NEW MFDA RULE (CONTINUING EDUCATION) The Canadian Institute of Financial Planning is comfortable with the continuing education guidelines as presented under Rule PROPOSED NEW MFDA POLICY # 9 (CONTINUING EDUCATION (CE) REQUIREMENTS FOR APPROVED PERSONS OF MFDA MEMBERS) PART A: PRO-RATION OF CREDITS education guidelines, as presented under Policy # 9, for new and returning Participants as well as for a Participant who changes his or her category of registration under securities legislation or his or her designated category under MFDA rules. PART B: LEAVES OF ABSENCE education guidelines, as presented under Policy # 9, to reduce the CE requirements for a PAGE 3 OF 6

4 Participant who, due to a leave of absence from his or her employer, was not employed as an Approved Person for a prescribed period of time. PART C: COMPONENT CONTENT BUSINESS CONDUCT The Canadian Institute of Financial Planning is a strong advocate of education that sharpens the awareness of a Participant with regards to his or her professional responsibility. As such, to ensure educational content under the Business Conduct category does in fact promote, direct and guide ethical and compliant conduct, CIFP would favour a requirement that accredited content must be application-based as opposed to just a straightforward knowledge of the rules. The educational material must demonstrate and test the Participant on how ethics, MFDA Rules and Policies and relevant legislation are applied in various scenarios so as to overcome or mitigate ethical dilemmas. PROFESSIONAL DEVELOPMENT The Canadian Institute of Financial Planning is comfortable with the topic areas that comprise the Professional Development category. This said, of the 20 continuing education credits that must be accumulated each cycle by an Approved Person registered as a dealing representative under Canadian securities legislation, CIFP would favour a cap on the number of CE credits that can be claimed under the heading of products and client management techniques. Additionally, specific criteria must be met in order for the content to be deemed a qualifying continuing education activity. Product knowledge and client management techniques are important and integral to the planning process however, all too often, education in these areas can stray from objective, technical competence to sales strategies. Content that explains the technical aspects of leveraged and inverse mutual funds and client suitability issues has merit; content that focuses on the magnified returns of leveraged and inverse mutual funds over any given period of time and how that can be used to spur additional investment from a client offers little value or perspective on the benefits and potential pitfalls of these products. Similarly, client management techniques, such as the use of engagement skills, to elicit detailed information about the client s preparedness for retirement is essential; client management techniques with an end goal of closing the sale should not be mistaken for continuing education. Limiting the number of CE credits that can be earned in the products and client management techniques categories to three to five credits each cycle as well as providing clear guidelines as to what form the content must take in order for it to qualify as professional development would be a prudent measure in the estimation of CIFP. PAGE 4 OF 6

5 PART D: DELIVERY STANDARD education guidelines with regards to delivery standards as presented under Policy # 9 subject to the comments under Part E, sections 9.3 and 9.4 pertaining to third party education providers. PART E: ACCREDITATION SECTION 9.3 Unfortunately, within the current landscape, there are continuing education regimes in force for designations and certifications that fall short of the mark. Their far too broad and lax definition of what constitutes a continuing education activity (e.g. in-house training that is sales oriented, seminars and workshops that are product focused, permission of unverified activities, such as reading financial publications, approval of courseware that is not academically sound or that does not serve to further the knowledge of the learner, etc.) waters down the integrity and legitimacy of a program purporting to promote the professional development of its participants. It is proposed that accreditation for continuing education activities be open to various participants, such as the MFDA, Members and other third parties, including education providers, mutual fund companies and industry associations. In the case of third parties, CIFP recommends acceptance of such participants be based on a stringent measure of their proven competency in education and putting forward a continuing education offering that is topical, relevant and that legitimately enhances and furthers the professional development of Approved Persons. Educational programs are not created equally. Similarly, there can be a significant variance in the approach and motives among education providers. Clearly, a rigourous examination of the actual content within a CE program should be part of the accreditation process however, a further step is required the strength and credibility of the educational offering can only be as good as the entity that creates the content. Therefore, CIFP favours a rigid assessment not only of each CE program but, equally, an evaluation of the body that is bringing the program to the table. SECTION 9.4 It is the hope of CIFP that there will be no hesitation on the part of the MFDA to firmly and unwaveringly enforce Step 4 of the accreditation process: rejecting accreditation applications from parties who have training activity materials or content that is incomplete or otherwise deficient in any respect. A vetting process that unapologetically separates the wheat from the chaff is the only way to preserve the integrity of this CE initiative. SECTION 9.6 MFDA Policy No. 9, Part C Delivery Standard, gives Members the option to provide (CE) content through their own training initiatives. PAGE 5 OF 6

6 This is reasonable and would mirror provisions in the continuing education regimes of other industry designations and certifications. In principle, CIFP does not object to this delivery standard however, the conditions that we have recommended apply to other programs should apply equally to in-house offerings, to wit: a rigourous assessment of both the quality and validity of the CE content as well as the firm that is providing the content. Simply because a prominent, national firm is sponsoring a continuing education program should not exempt it from scrutiny nor should it be automatically endorsed. PART F: EVIDENCE OF COMPLETION education guidelines with regards to evidence of completion as presented under Policy # 9. PART H: ASSESSMENTS education guidelines with regards to assessments as presented under Policy # 9. PART I: NON-COMPLIANCE education guidelines with regards to non-compliance as presented under Policy # 9. PAGE 6 OF 6