CIFP sues FP Canada for agreement breach, trade libel

The Canadian Institute of Financial Planning (CIFP) is suing FP Canada for $1.2 million, alleging breach of agreement, depreciation of goodwill and discrediting its business and services in violation of the Trademarks Act, and trade libel.

CIFP filed the claim on Wednesday with the Ontario Superior Court of Justice in Toronto. The allegations relate to CIFP’s trademarked Chartered Financial Planner designation, which was approved in March by the Financial Services Regulatory Authority of Ontario (FSRA) as a credential for the “financial planner” title.

Following FSRA’s approval, FP Canada issued a statement saying consumers could confuse the Chartered Financial Planner with the designation FP Canada oversees — the Certified Financial Planner designation. According to FSRA’s credential holder registry, 68% of credential holders under Ontario’s title protection rules held the Certified Financial Planner designation on March 22.

The CFP designation is subject to global financial planning standards.

FP Canada said in an email it was unaware that CIFP had filed a claim against it.

Gervas Wall, partner with Deeth Williams Wall LLP in Toronto and counsel for CIFP, said he had no comment at this time.

Following FP Canada’s statement in March, vehement criticism arose on social media about CIFP’s credential and FSRA’s approval of it. An industry coalition, which included the president of the Financial Planning Association of Canada and consumer advocates, called on FSRA to make CIFP rename its credential or rescind approval. The statement cited consumer confusion, as well as the potential for deception and abuse.

FP Canada made “false statements knowing that Chartered Financial Planner and Certified Financial Planner have co-existed on the Canadian register and in the Canadian marketplace for decades,” CIFP’s claim states. “By making these false statements, FP Canada took steps to have CIFP’s use of the Chartered Financial Planner credential restricted.”

CIFP has granted the Chartered Financial Planner since “at least as early as 1979,” the claim states, and previously used CFP as an abbreviation.

In 1995, FP Canada (then the Financial Planning Standards Council) began overseeing the Certified Financial Planner (CFP) credential in Canada. A dispute over the CFP credential was settled by a 1996 agreement between FP Canada and CIFP, along with the owner of the Certified Financial Planner and CFP credentials, the claim says. The owner at that time was the Certified Financial Planner Board of Standards, then based in Colorado.

As part of the agreement, CIFP joined FP Canada and assigned its “rights in CFP” to the Colorado corporation, the claim states.

“CIFP agreed not to grant its Chartered Financial Planner credential to any future student, so long as CIFP remained a member of FP Canada,” it states. (Citing a section of the agreement, the claim says CIFP maintained its credential for the hundreds of credential holders that existed as of 1996.)

CIFP stopped being a member of FP Canada “some time ago,” the claim states, and the parties had agreed that once CIFP was no longer a member, its use of the Chartered Financial Planner was “unrestricted.”

In 2004 the Financial Planning Standards Board (FPSB) became owner of the Certified Financial Planner and CFP trademarks. “FP Canada, FPSB (as successor in title … ) and CIFP continue to be bound by the settlement agreement,” the claim states.

CIFP does not abbreviate its designation.

The claim also alleges FP Canada “falsely asserted” that CIFP’s standards for its credential do not meet the standards of education and ethics needed to help consumers — a reference to FP Canada’s statement in March.

FP Canada had said title protection was meant to provide “clarity and confidence to consumers that someone calling themselves a ‘financial planner’ has met the high standards of education and ethics needed to help consumers achieve financial well-being.”

“FP Canada has refused or neglected to retract its statements as demanded by CIFP,” the claim states. “FP Canada’s statements have caused and will continue to cause significant monetary damage as well as irreparable harm to CIFP.”

Prior to CIFP’s claim, FP Canada told Advisor.ca it will continue raising its concerns with FSRA and the Ontario finance minister, and will “vigorously enforce against any unauthorized use of our licensed trademarks.”

Also prior to the claim, Keith Costello, president and CEO of the CIFP, told Advisor.ca his organization would continue using the credential with no changes. “We will defend any use of the trademark legally and vigorously if challenged,” he said.

Both the Certified Financial Planner and Chartered Financial Planner meet the regulatory standard for use of the financial planner title in Ontario, FSRA said in an emailed statement last week.

“Consumers can be confident that any approved designation used by a FSRA-approved credentialing body means a financial professional has met minimum education standards, is supervised, and must abide by a code of conduct,” the statement said.