Canadian Financial Advisor Qualifications and Courses

by Mike Holman

There are many things you should consider when choosing a financial advisor.  One of the items is their academic training.  Would you rather be advised by someone with the minimum amount of qualifications or someone who has made the effort to take extra financial planning courses?  Unfortunately, in Canada it is possible to become a “mutual fund salesperson” with very little training.

Depending on what you want from your advisor, their qualifications might or might not be important to you.  If you want to quickly set up an RESP account at your local bank, the in-branch investment specialist will probably be good enough.  If you are looking for advice on retirement planning including tax and estate issues, then you will want someone with more knowledge.

I’ve listed four common financial planning courses and designations.  When you are researching potential advisors, ask what courses they have taken.  Another idea is to ask when the last time they took any kind of training.  If they haven’t done any training in a while, ask how they keep up with recent changes in taxes, laws etc.

As Dr Rathgeber pointed out in the comments – don’t forget that just because someone has qualifications and knowledge, doesn’t mean they will use it for your benefit.

There are many other courses that are available – feel free to list any in the comments if you think they should be mentioned.

CFP – Certified Financial Planner

This is the only course listed that I haven’t completed any part of.  It is a very demanding course with two lengthy exams.  Basically you have to take the course approved by the Financial Planning Standards Council.  Then you write the exam and pray that you pass.  In order to get the actual CFP designation, you need three years of direct financial planning experience.

The material is quite extensive and covers all the various financial planning areas such as taxes, retirement, estate, investment planning.

I would suggest that if you want to hire a financial advisor that the CFP is the main designation that you look for.  It really encompasses all the subject areas necessary for financial planning.

CFA – Chartered Financial Analyst

The CFA designation is more appropriate for investment management, rather than financial planning.  Portfolio managers, investment analysts are the key jobs for this designation.  It is however, fairly common for CFA graduates to become financial planners. I would say this is the hardest designation to get – you have to write three lengthy exams and have four years of related investment experience.

Back in a former lifetime, I passed the first level of this exam.  I did the reading for the second level, but due to a career change – I never completed the 2nd level.  I’d love to get this designation now, but you need several years of investment experience to get the designation, which I can’t get with my current job.  It’s not worth the effort and money if I can’t get the actual designation to brag about.  :)

PFP – Personal Financial Planner

This PFP is a Canadian program offered by the CSI (Canadian Securities Institute).  I’m not personally familiar with this course, but apparently it is popular with bank employees.  It is a CFP qualifying course which is a definite vote of confidence.

FCSI – Fellow, Canadian Securities Institute

This section was provided by reader JT

FCSI is Fellow, Canadian Securities Institute. As you can probably guess from the name, it’s the CSI’s highest level of recognition and its requirements are the most demanding.

To get it, you need to complete:

  • One of the CSI’s accredited designations: CIM, CSWP, FMA (although this has been being discontinued);
  • One additional course (easily satisfied by completing the CPH)
  • One ethics module

In addition, you need a testimonial from an existing FCSI holder and need to satisfy certain CE requirements.

Despite the list of requirements, it’s not *that* much work for a career advisor. I think you’ll find this designation should be pretty widely-held amongst full service advisors.  It’s unlikely that someone selling mutual funds in a bank branch would have it, though.

CSC (Canadian Securities Course)

This course is a much harder course than the IFIC.  The material is more detailed and there is a lot more of it.  I remember thinking that this course wouldn’t be a lot of work, but I was wrong.  The CSC covers all the material from the IFIC plus topics like stocks, options, and bonds.

For any job involving investments other than mutual funds, the CSC is usually mandatory.  A broker’s assistant would need this, call centre employees for discount brokerages should take this.

For investors – this is a decent course to take.  It’s a fair bit of work, but you will learn quite a bit.

This course is self-study with a written exam.  It is suggested that 135-200 hours of study are necessary and I will agree with that.

IFIC – Investment Funds in Canada

This course is the easiest financial planning course available.  It is the minimum qualification to sell mutual funds in Canada.  How easy is it?  I wrote the exam without studying and passed easily.

The IFIC is suitable for a beginning investor, however I’m not sure if it’s worth the money given the plethora of financial advice articles on the web.  It covers basic financial planning and mutual funds.  If your (future) job involves selling mutual funds or giving advice on mutual funds then you will need to take this course.

More information

Check out my post on how financial advisors get paid.

Canadian Penny Stocks Blog wrote a good analysis of the CSC – Is the Canadian Securities Course For You?

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