The Ontario government is renewing its pledge to explore tightened regulation of the province's financial planners, and moving ahead with a committee to survey the landscape.
The fall statement released by the Minister of Finance Monday said the province would go ahead with plans to appoint "an expert committee to thoroughly consider more tailored regulation of financial advisers, including financial planners."
CIBC World Markets analysts Robert Sedran and Paul Holden called attention to the language, saying the planned committee was another indication that "retail wealth management reform [is] still gathering momentum."
The provincial government said that the independent committee will consult with the industry and other stakeholders to examine whether there should be more regulation in place, and will consider implementing proficiency and education standards, as well as addressing where complaints can be registered. In early 2016, the committee will issue its final report and recommendations.
It's not the first time the regulation of financial planning and the investment process have been explored by the government, or by regulators such as the Ontario Securities Commission. The Ontario government's deeper dive into regulating financial planners was first introduced in the 2013 Fall Economic Outlook and Fiscal Review, and consultations with players such as banks, insurers and industry associations happened earlier this year.
As CIBC points out, the incremental movements are part of a bigger shift in the Canadian wealth management landscape. The financial planner proposals are happening against a backdrop of upcoming changes to mutual fund fee disclosure requirements, known as CRM2. There's also the ongoing study of, and suggestion to ban, trailer fees, the payment made by fund companies to advisers whose clients invest in the company's funds. On top of that, the Ontario government is also intending to roll out an Ontario Retirement Pension Plan initiative to supplement existing federal retirement programs.
"Developments such as the ones announced by the government of Ontario only strengthen our conviction that regulatory reform is highly unlikely to end with the implementation of CRM2," CIBC says.