There could be changes ahead for the Standards of Professional Responsibility set by the Financial Planning Standards Council.
An independent panel appointed by the FPSC’s board of directors has recommended several amendments to the standards including replacing the current Client First principle with a new Duty of Loyalty; and revised disclosure obligations.
“The Standards of Professional Responsibility represent the rigorous ethical and professional responsibilities required of CFP professionals and FPSC Level 1 certificants. The standards provide important direction to support the professional practices of financial planners,” says Susan Howe, CFP, Chair of FPSC’s Standards Panel. “The Standards Panel is committed to ensuring that the standards appropriately evolve over time in tandem with the continuously changing needs and expectations of Canadians and of the profession.”
A consultation period has now begun and will run until September 14, 2018. Interested parties can email email@example.com to provide feedback.
Duty of Loyalty
The current Client First principle states:
“A CFP professional shall always place the client’s interests first. Placing the client’s interests first requires the CFP professional to act honestly and to place the client’s interests ahead of his/her own and ahead of all other interests.”
The proposed replacement is a Duty of Loyalty encompassing:
- The duty to act in the client's interest by placing the client's interests first. Placing the client's interests first requires the Certificant place the client's interests ahead of their own and all other interests;
- The obligation to disclose conflicts of interest and to mitigate conflicts in the client's favour; and
- The duty to act with the care, skill and diligence of a prudent professional.
The full text and details of the proposed changes to the Disclosure Obligations are available on the fpsc.ca website.
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