IDA advisors facing CE deadline

(October 2005) The IDA is calling on its advisors and member firms to finish what they started. That’s the basic message conveyed in a friendly letter circulating this month, reminding advisors of the upcoming deadline — and “offside” penalties — for completing continuing education (CE) requirements — part of the IDA’s mandate stipulating that securities industry members fulfill a certain number of CE credit hours over a three-year program, or cycle.

“[The IDA] decided it was important for people to have a proficiency level that they would continue throughout their careers,” says Jay Flye, vice-president of sales for CSI Global Education in Toronto (formerly known as the Canadian Securities Institute). And now “everyone’s scrambling,” he notes, as investment advisors across the country head into the home stretch of “CE Cycle Two”, which ends December 31. Cycle three begins in January 2006 and runs to the end of 2008.

For the last 35 years, CSI has primarily promoted its continuing education mandates and program offerings to more than 30,000 investment advisors in the securities industry, including 25 online, “mini courses” which are between three and nine credit hours; seven in-class seminars, and 25 full courses such as the Canadian Securities Course or wealth management techniques. “We have 35 dates that we have scheduled between now and the end of the year for different types of seminars, and we get to deliver the material in a way that our clients want to learn,” says Flye.

The CSI’s courses aren’t restricted to IDA members, Flye notes, but also apply to advisors who are licensed with other regulators within the mutual fund, banking and insurance industry.

For example, CSI’s online anti-money laundering course satisfies three hours of compliance training and three hours of professional development training for the IDA, but the courses are equally applicable to members of Advocis, the IQPF in Quebec and the Alberta Insurance Council. Flye says courses are also designed for advisors who are multi-licensed.

“As we build our courses, we are very cognizant of making sure that they would satisfy as many requirements across other self regulated [areas] as possible.”

And a lot of advisors are feeling the CE crunch. Flye notes course participation is up 200% compared to last year.

But he stresses CE shouldn’t merely be about “checking off boxes to say that you’ve completed three hours of this and 12 hours of that.” Rather, the intent should be “Am I as an advisor serving my client to the best of my abilities?” He adds CE’s mandate should include the notion that as markets change, so do products and new issues entering the industry sphere. In fulfilling their CE requirements, advisors are in effect properly protecting clients’ interests, providing them with suitable services as a result of paying attention to their own marketplace position.

Flye says neglecting to do this basically boils down to failing your professional obligation to clients. “Do I blame someone who doesn’t do it for two years and then jams it all in the end? Yeah, I do blame them because they shouldn’t have that approach. Yes, business is business and time is short, but you owe it to your client to make sure you’re taking the time to be at the forefront,” he says.

Although many advisors have yet to complete Cycle Two, Flye says a few advisors are beating them to the punch and are already planning for Cycle Three. Shelly Appleton-Benko is one of them. A portfolio manager and director of Odlum Brown in Vancouver, she fulfilled all her CE requirements in February 2004. She might be a keener among her industry peers, however, she acknowledges an inherent need to stay ahead of the game.

“If you don’t take the time out to educate yourself, your business won’t grow because things change, the types of products clients are looking for change, and inevitably the rules around those products change for you,” she says.

“Education is a constant thing you have to continually ask yourself do you need it,” she notes, adding that many of her clients are converting to managed accounts, which requires her to know all the legalities that come with being licensed.

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“When you first write your securities exam and your start as an investment advisor, there are so many things about your business that develop 15 years later that you don’t know what your business is going to be like. For example, in year 13, I became a portfolio manager, so not only did I manage money discretionally, but there was a lot more money,” she explains.

Further, failing your CE requirements comes with a cost, warns IDA assistant regional director, Richard Korble, in the form of a $500 fine if you’re not onside with your required courses by “the last day of the last month of the third year of the cycle.”

“Your firm will be assessed and you will also become placed under mandatory supervision if you have not completed your courses by that time,” he explains, adding that investment advisors will be fined a further $500 at the beginning of each month should they still not have completed their course assignments. At the six-month point of incompletion, the license will be suspended until the person has completed the required courses — even if you’re just shy one course.

“You should very quickly find out where you sit in terms of your CE requirements because time does run out very quickly,” he says. “There are lots of other options out there, with us, with the CSI, with third-party providers. Find out where you are and don’t let it slide because the firm will definitely know who is lacking courses, and they’ll be hearing from their own firm as well as us in the short term.”

Filed by Heidi Staseson, Advisor’s Edge, heidi.staseson@advisor.rogers.com

(9/13/05)

Heidi Staseson