Campaign | March 2, 2024

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Ontario regulator introduces an online tool to check financial advisors’ qualifications

The Financial Services Regulatory Authority of Ontario (FSRA) has initiated an educational campaign aimed at encouraging consumers to verify the credentials of financial advisors before seeking advice. With the introduction of the new online Check Credentials Tool, individuals can now easily confirm if their financial professionals possess the necessary qualifications to use titles like Financial Planner or Financial Advisor in Ontario.  The Check Credentials Tool allows consumers to verify if financial professionals hold the required credentials to use specific titles, ensuring they meet minimum education standards and are under proper supervision.

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FSRA’s research indicates a concerning trend where 50% of respondents spent more time researching their last cellphone purchase than verifying the credentials of their financial advisor.  The tool is designed for convenience, enabling users to quickly check a financial professional’s standing, including any disciplinary actions.  In Canada, financial advisor scams have evolved, becoming more sophisticated and causing significant losses to consumers.

Huston Loke, Executive Vice President of Market Conduct, FSRA:

“In many cases people are entrusting their life savings to financial professionals and they expect that these people are properly trained and supervised.  We encourage consumers to check credentials and we are making it easy through our new Check Credentials Tool.”

Investment Scams Are Getting More Sophisticated

In Canada, financial advisor scams have evolved, becoming more sophisticated and causing significant losses to consumers. According to a CTV News, the top scams include:

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• Investment Scams: These scams lead with Canadians losing substantial amounts, such as $70.2 million in 2021 alone. Fraudsters create fake accounts or websites, convincing people to invest in cryptocurrencies or other ventures, with none of the money being genuinely invested.
• ‘Pig Butchering’ Scams: Utilizing social media and dating sites, scammers build virtual relationships and eventually solicit money, resulting in over $42.2 million lost by Canadians.
• Spear Phishing: This scam involves sending emails or texts pretending to be legitimate entities to access personal accounts, causing $38 million in losses.
• Merchandising Scams: Using classified ads or fake websites to sell items or rent properties, leading to $5.6 million in losses.
• Service Scams: Offering fake services like phone plans or insurance to steal personal information or access bank and credit card accounts, with $4.8 million lost.

Outlook

By making it easier for individuals to verify the qualifications of financial advisors, the FSRA is empowering consumers to make more informed decisions regarding their financial planning and investments.

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This initiative promotes transparency and accountability among financial professionals and also contributes to the overall trust and integrity of the financial services industry.

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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• Source: https://ncfacanada.org/fsra-launches-tool-to-verify-financial-advisors-credentials/