How to effectively implement the new IIROC CE Requirements to achieve higher competency levels at lower cost

Why are IIROC proposed enhancements to continuing education (CE) and the MFDA’s planned introduction of the same causing such upheaval in the industry? Two reasons: standardization and cost, say the firms with whom we have spoken. Are these valid objections? No, they are not. Let us explain.

Greater Choice for Professional Development

With the availability of automated advice offered by robo-advisors and talk of the best interest standard, there is increased pressure for advisors to distinguish themselves by increasing their proficiency level. With this in mind:

IIROC’s CE proposals actually provide greater latitude for registrants to fulfill requirements—registrants can now use courses toward IIROC CE that are required for other licenses or designations, such as insurance and financial planning.

Given the changing nature of the role of an IIROC advisor, one increasingly focused on portfolio recommendation and less on stand-alone security selection, a broader understanding of a client’s financial situation would seem to contribute to better client outcomes.

Advisors will now also be able to use courses relevant to roles to which they aspire, rather than just their immediate position to satisfy IIROC CE. This facilitates professional development.

Far from standardizing requirements, the IIROC proposal allows for a broader array of qualifying courses. Individuals and firms have greater latitude in selecting the direction of professional development to suit their business models.

Automation is an opportunity to lower costs of administering CE

For IIROC registered firms, it is the procedural changes that are causing the greatest grief—effective January 2018, IIROC proposes to shorten the cycle from 3 to 2 years, and reduce credit hours from 12 to 10 for compliance, and from 30 to 20 for professional development.

While the average yearly CE hours will increase slightly, it is the ability to track these changes that is causing the greatest pushback from industry.

Add to this the requirement that new registrants, who were previously exempt from their first CE cycle, are now required to complete CE if registered within the first 18 months of a cycle, and you can see why the banks in particular—large ships which are difficult to turn—may find it onerous to track these changes.

The grace period that IIROC previously allowed for registrants who did not complete CE on time will also disappear with licensing suspensions taking place immediately—unproductive staff and fines are onerous penalties indeed.

Do these changes add up to more costs? Not necessarily. It is surprising the extent to which CE and proficiency standards are manually tracked even at the largest firms. Automating the tracking of course requirements is an opportunity for cost savings.

Automation will facilitate application of CE courses across various licenses and designations, providing a cost savings as CE is rationalized.

Automation of CE tracking can also enhance competency levels—through customized reporting, a firm can target and track professional development on an individual level, as well as proficiency designed to achieve new business requirements on a divisional or branch level.

With the regulation of financial planning forthcoming in Ontario, ensuring that staff meet the new standards to qualify for licensing will be critical to achieving revenue targets, elevating proficiency to board-level importance.

VigilantCS – Founded by compliance professionals, VigilantCS provides a cloud-based platform for the management and monitoring of staff-level compliance through the automation of regulatory requirements, digitized data and conduct risk analytics.