If you are a licensed financial advisor, and thinking of starting your own financial practice, or are looking to embark on a career as a financial services advisor, IFB has resources to help! This page will provide you the information you need to start your journey.
Being an independent financial advisor can be a rewarding and satisfying career choice. But before you decide, there are some things to think about. First, as an independent operator of your own firm, you will be taking on responsibilities that may previously have been looked after by your financial firm.
These responsibilities include becoming accountable for the costs and dedication associated with operating an independent practice such as, renewing your license and keeping it in good-standing, meeting your compliance obligations (e.g., continuing education, errors and omissions insurance, and implementing privacy and anti-money laundering practices), entering into contractual relationships, building a book of business, and covering the operating expenses of your business.
If you have never been self-employed, it would be wise to conduct your own research and consult with a tax or legal advisor to better understand what this will mean and what type of corporate structure (if any) will best suit you.
If you are new to the industry, it’s important to understand that the Canadian financial services industry is heavily regulated to protect consumers and ensure the stability of our financial system. There are 13 provincial/territorial life insurance and securities regulators. The mutual fund industry has a national self-regulatory body, called the Mutual Fund Dealers Association or MFDA. It regulates firms (and their advisors) which only sell or provide advice related to mutual funds. The broader securities industry has a national self-regulatory body called the Investment Industry Regulatory Organization of Canada, or IIROC. IIROC regulates firms (and their advisors) who sell a variety of investment products. Individual securities commissions/regulators regulate portfolio managers, scholarship plans, exempt market products. Find more information here.
Life insurance is regulated by each provincial/territorial regulatory body. There is no national “self” regulatory equivalent to the MFDA or IIROC. Life insurance companies are responsible under provincial insurance acts for the conduct of the agents they contract with, in addition to the oversight provided by each jurisdiction’s regulator. Life insurance regulators collaborate with a view to harmonizing policy, legislative and regulatory standards for the industry across Canada. These industry bodies are Canadian Insurance Services Regulatory Organizations(CISRO) and the Canadian Council of Insurance regulators(CCIR).
Sometimes individuals thinking of becoming an independent advisor equate it with having little or no regulatory oversight. Sometimes individuals think that being independent means not paying, or sharing, commissions or other compensation with a firm or dealer. Neither of these assumptions are true.
What “independent” does mean is that you will not be an employee of a firm or a career agent of a single insurer. Some advisors work for a firm which offers proprietary products. This often limits, or restricts, the products they can provide to consumers. Independent brokers/agents can offer consumers financial products from multiple companies.
If you’d like to learn more from an experienced independent advisor, IFB can put you in touch with one, Contact us
Your IFB Membership gives you a seat at the table when policy decisions impacting
your business are discussed.
©2023, Independent Financial Brokers of Canada. All right reserved