Traits of an Ethical Financial Planner
If you think finding an ethical, qualified financial planner is simply a matter of Googling “financial planner”, better think again.
Across Canada (except in Quebec), anyone can currently call themselves a financial planner without having any qualifications to back it up. But when it comes to taking care of your finances, now and for the future, you need the best. After all, you’ve worked hard for your money, and making it work hard for you means having a professional on your side.
Before they can become certified, CFP® professionals go through a rigorous program of education, examinations and work experience to prove their worth.
But that’s not all: FPSC certificants, including CFP professionals, must adhere to the eight-point FPSC® Code of Ethics that emphasizes accountability, to the public, clients and colleagues. The Code of Ethics is vigilantly enforced by Financial Planning Standards Council (FPSC), which works in the public interest.
Here are the principles. Use them as a measure to find the right professional to help secure your financial future.
1. PUT MY CLIENTS’ INTERESTS FIRST
Top of the list is a written obligation to put clients’ interests first at all times—even if there are differences in compensation for selling one product over another. To maintain certification, every CFP professional must re-attest to this principle annually and agree to be bound by it and accountable.
2. ACT WITH INTEGRITY
Trust and confidentiality are cornerstones of integrity. A CFP professional must uphold the principle of integrity at all times, inspiring confidence and upholding a strong moral compass. You’re entrusting your financial future to your planner. It’s only right they be held to the highest ethical standard.
3. BE OBJECTIVE
Objectivity means keeping emotions, personal bias and competing priorities out of the decision-making process. CFP professionals make recommendations based on sound knowledge, strong judgement and a full understanding of their clients’ goals and objectives.
4. MAINTAIN COMPETENCE
It’s not enough to qualify for CFP certification just once in a lifetime. In addition to meeting demanding certification requirements, CFP professionals must keep their skills up-to-date and develop additional knowledge throughout their career. This enables a CFP professional to provide effective advice and service to clients as the financial environment evolves and individual circumstances change.
5. BE FAIR AND OPEN
Fairness is about impartiality and disclosure. CFP professionals must be honest and objective, providing advice and planning without regard to compensation, bias, employer or any other interests. They must also communicate at a level that’s understandable to clients. When you begin working with a CFP professional, he or she will clearly and transparently communicate to you the services to be provided, any potential conflicts of interest they’re aware of, how they’ll be compensated and what you can expect from the relationship.
6. MAINTAIN CONFIDENTIALITY
As electronic data storage becomes more pervasive, the protection of private information is critical. A CFP professional is bound to ensure the protection of all client data regardless of how it is stored or delivered. That includes digital and paper files and correspondence, as well as verbal discussion.
7. ACT DILIGENTLY
Diligence is about being mindful when guiding, informing, planning and delivering financial advice and services to clients. Circumstances can change quickly in your life and the world around you. A CFP professional has the knowledge and ability to respond effectively to those changes and help motivate you to take actions that will help you reach your financial goals.
8. ACT PROFESSIONALLY
Beyond the expertise required to practice in a field, it’s the high standard of ethics, behaviour and service, and the manner in which the service is delivered, that sets an individual apart as a professional. By following the FPSC® Code of Ethics, CFP professionals hold themselves to a level of professionalism that inspires confidence, respect and trust. The CFP designation is the mark of a professional that puts clients’ interests first.
Originally published by Financial Planning Standards Council. Republished with permission.
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