- The Standards Council has added two new Rules of Conduct to
the Standards of Professional Responsibility.
- The updates also included the addition of a new Practice
Standard and comprehensive amendments and updates to all Practice
Standards for relevance and clarity.
- The changes are focused on supporting CFP®
professionals and QAFP® professionals in protecting vulnerable
clients and avoiding conflicts of interest.
TORONTO, May 22, 2024 /CNW/ - The FP Canada Standards
Council, a division of FP Canada™, has announced amendments to
the FP Canada Standards Council Standards of Professional
Responsibility (the "Standards"). The Standards are enforced by
the Standards Council and maintained by the Standards Panel, an
independent panel made up of Certified Financial Planner®
professionals, licensed financial planners from Québec, and members
of the public.
The Standards Council recently revised the Standards of
Professional Responsibility as part of a continuous effort
to ensure CFP professionals and QAFP professionals are held to high
standards of competence, professionalism, and ethical conduct. The
changes take effect June 1, 2024.
"Financial planning standards must evolve alongside the
profession and the needs and expectations of Canadians," says
Julie Seberras, CFP, Chair of the
Standards Panel. "By reviewing these standards on a regular basis,
we ensure that they remain relevant, no matter the landscape in
which financial planners and their clients are operating."
New Rules of Conduct and an Additional Practice
Standard
The amendments include the addition of two new Rules
of Conduct. The first rule relates to the identification and
documentation of a Trusted Contact Person. It states that CFP
professionals and QAFP professionals must inform their clients
about the role of a Trusted Contact Person (TCP) and take
reasonable steps to determine whether they would like to name a
TCP. These obligations are complimentary to those that planners who
are subject to the measures implemented by the Canadian Securities
Administrators (CSA) are required to adhere to when opening an
account or updating client information. This rule will help ensure
that financial planners have an authorized person who they can
contact and share personal information with under certain
circumstances, such as if they suspect their client is being
financially exploited. As such, it protects potentially vulnerable
clients.
The second new Rule of Conduct prohibits a CFP
professional or QAFP professional from, among other
things, acting as an estate trustee or executor, acting as a
power of attorney for property, or knowingly being named as a
beneficiary for a client while concurrently providing them with
financial planning services. There is an exemption where the client
is a family member. This rule protects the public by helping
financial planners avoid conflicts of interest.
The Standards Panel also introduced a new Practice
Standard. The "Monitor and Review" Practice Standard
notes that, if the financial planning engagement includes
ongoing monitoring, financial planners should engage in regular
reviews. Any revised assumptions or recommendations resulting from
these reviews should be documented and incorporated in an updated
financial plan. This Practice Standard helps ensure
that clients' financial plans are aligned with their current goals,
needs and priorities.
In addition to the new Practice Standard, each of the
existing Practice Standards were updated for relevance and
clarity. These changes were made in response to feedback provided
through a consultation process with a working group formed by the
Standards Panel, which is detailed below.
"Further strengthening the Standards of Professional
Responsibility helps the Standards Council ensure the Standards
reflect current practice expectations and meet the expectations of
Canadians," says Damienne
Lebrun-Reid, Vice President Standards, Certification, and
Enforcement at FP Canada and Head of the FP Canada Standards
Council. "The updated Rules of Conduct and Practice
Standards support CFP professionals and QAFP professionals in
providing financial planning services and are in the public
interest, with amendments focused on protecting vulnerable clients,
and ensuring planners are mitigating and avoiding conflicts of
interest."
CFP professionals and QAFP professionals are encouraged to
review the updated Practice Standards and Rules of
Conduct carefully to ensure they understand their professional
obligations.
Support for the Amendments
A recent survey carried out by the Standards Panel provided
insights into how financial planners view the revisions to the
Standards of Professional Responsibility. The consultation
resulted in responses from just over 1,000 planners certified by FP
Canada. The panel also carried out a similar survey of key industry
stakeholders.
The survey found that, regarding the first new Rule of
Conduct (about Trusted Contact Persons), 84% of respondents
either agree or strongly agree that it is both relevant to practice
and in the public interest. In the stakeholder survey, 100% of
respondents believe it was in the public interest.
With regard to the second rule (related to certain types of
potential conflicts of interest) 92% of financial planners
said it was relevant to the practice of financial planning.
Likewise, 87% believed it was in the public interest. Once again,
100% of stakeholder respondents believed the rule was in the public
interest.
The Standards Panel also formed a working group to provide
recommendations regarding the need to update the Practice
Standards and provide additional guidance to financial
planners. The working group released two surveys: the first
elicited responses from 885 financial planners, while the second
was focused on industry compliance representatives. These surveys
shaped the changes to the Practice Standards.
About FP Canada
Established in 1995, FP Canada is a national not-for-profit
education, certification and professional oversight organization
working in the public interest. FP Canada is dedicated to
championing better financial wellness for all Canadians by leading
the advancement of professional financial planning in
Canada.
About the FP Canada Standards Council
A division of FP Canada, the FP Canada Standards Council
establishes and enforces financial planning standards, sets the
certification requirements for professional financial planners and
develops and delivers certification examinations. The FP Canada
Standards Council ensures FP Canada certificants ― Certified
Financial Planner professionals and Qualified Associate Financial
Planner professionals ― meet appropriate standards of competence
and professionalism through rigorous requirements of education,
examination, experience, and ethics.
SOURCE FP Canada