FPSC updates professional responsibility standards
The Financial Planning Standards Council (FPSC) announced Dec. 11 that its Standards Panel has approved amendments to the Standards of Professional Responsibility for CFP® Professionals and FPSC Level 1® Certificants in Financial Planning. The revised standards include the introduction of a “Duty of Loyalty” in the Code of Ethics, which replaces the existing “Client First” principle.
The FPSC says the “Duty of Loyalty enhances the duty requiring CFP professionals and FPSC Level 1 certificants to place the client’s interests first by encompassing specific obligations, including the duty to act with honesty, integrity, competence and diligence; to disclose and mitigate conflicts of interest in the client's favour; and to act with the care, skill and diligence of a prudent professional.”
The revised standards will come into force on Jan. 1, 2019. The Standards of Professional Responsibility include the: Code of Ethics; Rules of Conduct; Fitness Standards; and Financial Planning Practice Standards.
Prohibition on lending to clients
Other amendments, such as a prohibition on lending to clients and borrowing from clients, new obligations to prospective clients and changes to compensation disclosure obligations, among others, are intended to ensure financial planners certified by FPSC are held to appropriately high professional standards expected by the public, says the FPSC.
“The Standards of Professional Responsibility set the framework for the financial planning profession in Canada. It is important that these standards remain current and relevant over time,” says Susan Howe, CFP, Chair of FPSC’s Standards Panel. “The recent amendments to the standards will help to further strengthen Canadians’ confidence in professional financial planners and to clarify the expectations of professional financial planners.”