By By iA Private Wealth, July 20, 2022
Investing is an essential part of building a retirement nest egg. But it can be complex, time consuming and even detrimental if done without proper research and guidance. That’s why many Canadians work with an advisor to help them select the right investment solutions and strategies to achieve their financial objectives.
When choosing an advisor, it’s important to inquire about their credentials and the services they’re qualified to offer. Learning about industry-specific titles and designations may help you determine what an advisor brings to the relationship and how they can assist with your wealth goals.
Regulatory oversight
Two regulatory bodies are responsible for advisor licensing in Canada.
The Mutual Fund Dealer’s Association of Canada (MFDA) oversees regulation of mutual fund dealers and sales representatives. MFDA-licensed advisors can offer advice and execute trades related to mutual funds. If they meet enhanced proficiency requirements, they can also provide access to exchange-traded funds. These advisors often offer insurance solutions as well, though this activity falls under a separate provincial and federal regulatory regime.
The Investment Industry Regulatory Organization of Canada (IIROC) oversees regulation of “full-service” investment dealers and their advisors. In addition to the products and services offered by MFDA-licensed advisors, IIROC-licensed advisors can provide access to securities such as individual stocks, bonds, derivatives and commodities. Many IIROC-licensed advisors also provide access to insurance products.
IIROC and the MFDA are proposing to merge into a single regulatory organization, which should allow for more efficient and consistent industry regulation.
Job titles
The industry has moved increasingly toward standardization and transparency of titles. For instance, an advisor registered as a Registered Representative may use the title of Investment Advisor or Wealth Advisor. If such advisors meet certain criteria (e.g., minimum five years of experience, responsibility for $40+ million in client assets), they’re entitled to be called Senior Investment Advisor or Senior Wealth Advisor. As an investor, you can gain a better understanding of an advisor’s experience and qualifications just from their title alone.
Industry designations
The professional designations an advisor has earned reflect their skill set. To uphold their designations, advisors must fulfill certain ongoing education and training requirements. Here are some common designations among advisors:
- CERTIFIED FINANCIAL PLANNER® (CFP®). Advisors holding the CFP designation have completed intensive education in all aspects of financial planning, and are equipped to create customized financial plans. In Quebec, the comparable designation is Financial Planner (F.Pl).
- Personal Financial Planner® (PFP®). Advisors with this designation focus primarily on financial planning for individuals. PFPs are knowledgeable about investments, insurance solutions, and tax and estate planning.
- Chartered Investment Manager® (CIM®). Those who have earned the CIM designation commit to deciding which investment solutions are most appropriate for each client by managing investments according to prevailing market and economic conditions.
- Chartered Alternative Investment Analyst (CAIA). CAIA charterholders may be responsible for managing, analyzing, distributing or regulating alternative investments. As more investors use alternatives to help enhance risk-adjusted returns, the role of a trained CAIA charterholder gains relevance.
- Chartered Financial Analyst (CFA). CFA charterholders are highly educated in disciplines such as portfolio management and investment analysis. Only a small percentage of advisors hold this elite designation.
- Responsible Investment Specialist (RIS). Advisors licensed to sell mutual funds may complete the requirements to earn the RIS designation and focus on selecting investments for clients that meet environmental, social and corporate governance (ESG) criteria.
While industry-related licensing and designations vary, all qualified advisors can offer significant value. In the case of an Investment Advisor, they may provide extremely knowledgeable guidance around financial planning, investment selection and monitoring, and tax management. As well, when markets are volatile and emotions tend to run high, they help keep clients disciplined and focused on their long-term goals.
There are many ways our advisors can help you meet your financial objectives, so please reach out and connect with a member of our team today.
This article is a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.
iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and a business name under which iA Private Wealth Inc. operates.
This is not an official website or publication of iA Private Wealth and the information and opinions contained herein do not necessarily reflect the opinion of iA Private Wealth. The particulars contained on this website were obtained from various sources which are believed to be reliable, but no representation or warranty, express or implied, is made by iA Private Wealth, its affiliates, employees, agents or any other person as to its accuracy, completeness or correctness. Furthermore, this website is provided for information purposes only and is not construed as an offer or solicitation for the sale or purchase of securities. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces where they are registered.
Products and services provided by third parties, including by way of referral, are fully independent of those provided by iA Private Wealth Inc. Products offered directly through iA Private Wealth Inc. are covered by the Canadian Investor Protection Fund, subject to exception. iA Private Wealth Inc. does not warrant the quality, reliability or accuracy of the products or services of third parties. Please speak to your advisor if you have any questions.
*Insurance products and services are offered through Accureta Wealth Inc., an independent and separate company from iA Private Wealth Inc. Only products and services offered through iA Private Wealth Inc. are covered by the Canadian Investor Protection Fund.
