Specifically, CIRO will pay a fixed fee of $25,000 under the rule, while other credentialing bodies — including FP Canada — will pay that amount plus variable costs based on a calculation that includes their number of credential holders plus FSRA’s budget.
In an emailed statement on Tuesday, FP Canada said it was “disappointed” that the fee rule was approved, and described the fixed fee as “arbitrary” — an issue raised during the consultation period.
“Other than to state in general terms that the objective of the revised fee rule is to avoid duplication of regulatory oversight, FSRA has not been able to provide any rationale for the quantum of the $25,000 fixed fee,” FP Canada said in its statement. “Given the lack of information provided to stakeholders, it is challenging to understand how the revised fee rule aligns with FSRA’s principles of fairness, consistency and transparency.”
In summarizing stakeholder comments made during the consultation, FSRA said fixed and variable fees were based on estimates and communicated during the original consultation on title protection. FSRA said in the summary that it will be “monitoring based on experience whether this fixed amount needs to be revised to ensure relative equity between CIRO and other [credentialing bodies].”
In a statement on Tuesday, FSRA said that because CIRO is subject to oversight from the OSC and the Canadian Securities Administrators, having the SRO pay for oversight from FSRA as well is not warranted.
“Should CIRO come on board as a credentialing body, start-up cost allocations will be adjusted to all,” the regulator said. “This will also result in an overall reduction of fees for all existing credentialing bodies.”
Most stakeholders had concerns with the fee rule, FP Canada’s statement said. “Many stakeholders recommended consumer-focused alternatives and suggested a better way to bring CIRO into Ontario’s title protection framework.”
FP Canada noted in its consultation submission that the rule could have the unintended consequence of undermining accessibility to financial planning advice and “entrenching ‘financial advisor’ proficiency at the level of product licensure.”
In an email to subscribers on Tuesday, consumer advocate Ken Kivenko of Kenmar Associates said he didn’t support CIRO as a credentialing body, citing the potential for mutual fund salespersons to use the financial advisor title. Also, reduced fee collection will require FSRA to divert costs to credentialing bodies that grant credentials for the financial planner title, which is “unfair and undesirable,” Kivenko wrote.
In its statement, FP Canada called on FSRA and the Ontario Ministry of Finance to “work in good faith with all stakeholders to restore fairness to the allocation of costs associated with Ontario’s title protection framework.”