Don’t use planning software blindly, says FP Canada

New rules of conduct call on professional planners to be informed of underlying methodologies and assumptions

Don’t use planning software blindly, says FP Canada

As tech platforms become increasingly integral to the financial planning process, FP Canada has announced new rules around how CFP and QAFP professionals use software when they provide financial planning services.

The FP Canada Standards Council, FP Canada’s rulemaking division, has amended its Standards of Professional responsibility with two new rules governing how FP Canada certificants use technology.

Under Rule 28, certificants relying on or using technology in the financial planning process must take reasonably proactive steps to have a general understanding of the underlying methodologies that can impact the software’s projections and recommendations, as well as the financial assumptions that inform those recommendations.

Certificants must also ensure the validity of the inputs and assumptions used based on the client’s circumstances, and validate that outputs generated are reasonable and appropriate for the client before relying on them.

Rule 29, meanwhile, holds that the material assumptions as well as the rationale used in the planning process must be documented and clearly communicated to clients.

“Technology continues to reshape the financial planning profession,” said Lesley Poole, CFP and chair of the Standards Panel. “The inclusion of these new rules of conduct underscores the Standards Council's commitment to maintaining high financial planning standards, in the public interest.”

The new rules were developed by a working group set up by the Standards Panel. A draft version of the rules was published for comment in January, and the final rules were approved in March 2021 and later came into effect on July 1.

“CFP professionals and QAFP professionals use technology throughout their practice and to support interaction with clients,” said Julie Seberras, CFP and senior manager, Wealth Planning Support at TD Wealth, who was a member of the working group as well as the Standards Panel. “The rules reflect this reality and set clear expectations around financial planners using and relying on technology.”


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