FP Canada Standards Council, a division of FP Canada, has recently amended the Standards of Professional Responsibility, to include two new rules of conduct governing the use of technology by Certified Financial Planner (CFP) professionals and Qualified Associate Financial Planner (QAFP) professionals when providing financial planning services.
The new rules are as follows:
Rule 28: When relying on or using technology in the financial planning process, a Certificant:
- Must take reasonable proactive steps to gain a general understanding of the methodologies underlying the technology that have a direct impact on financial planning projections and recommendations;
- Must have an understanding of the financial assumptions underlying the technology that have a direct impact on financial planning projections and recommendations;
- Must validate that the inputs and assumptions used are reasonable and appropriate based on the client's circumstances; and
- Must validate that the outputs generated are reasonable and appropriate for the client before relying on them, or presenting the final recommendations or strategies to the client.
Rule 29: In all cases, irrespective of the data used, the material assumptions used as well as the rationale must be documented, and clearly communicated to clients.
The organization underlines that the new rules of conduct are accompanied by extensive guidance and should be read in conjunction with this guidance.
"Technology continues to reshape the financial planning profession. The inclusion of these new rules of conduct underscores the Standards Council's commitment to maintaining high financial planning standards, in the public interest," said Lesley Poole, CFP, Chair of the Standards Panel.