TORONTO, ON – December 11, 2018 – Financial Planning Standards Council (FPSC)’s Standards Panel—an independent panel appointed by the Board of Directors and comprised of financial planners and members of the public—has approved amendments to the Standards of Professional Responsibility for CFP® Professionals and FPSC Level 1® Certificants in Financial Planning (the Standards of Professional Responsibility). The revised Standards of Professional Responsibility will come into force on January 1, 2019 and govern the conduct of Certified Financial Planner® professionals and FPSC Level 1 Certificants in Financial Planning from January 1, 2019 onward.
The Standards Panel is responsible for the maintenance of the standards for the financial planning profession, including the Standards of Professional Responsibility, which define the ethical and professional responsibilities of CFP professionals and FPSC Level 1 certificants. The Standards of Professional Responsibility include the: Code of Ethics; Rules of Conduct; Fitness Standards; and Financial Planning Practice Standards.
The revised Standards of Professional Responsibility include the introduction of a “Duty of Loyalty” in the Code of Ethics, which replaces the existing “Client First” principle. 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.
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.
“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.”
More details about the revised Standards of Professional Responsibility are available on the FPSC website.
In late 2017, the Standards Panel struck a working group composed of CFP professionals from across Canada with diverse practice backgrounds to review the current Standards of Professional Responsibility
and to identify opportunities to enhance the standards to ensure currency and continued relevance in today’s financial planning environment. In June 2018, the Standards Panel considered and approved the proposed amendments, in draft form. In August 2018, the Standards Panel directed that the draft amended standards be released to certificants and the public, for comment. Between August 9 and September 14, 2018, the Standards Panel engaged in a public consultation process, which resulted in numerous comments and feedback on the proposed amendments. In October 2018, the Standards Panel met to carefully consider the feedback and input received. The Standards Panel has now released the finalized revised Standards of Professional Responsibility
, which will take effect on January 1, 2019.
About Financial Planning Standards Council
A professional standards-setting and certification body working in the public interest, FPSC’s purpose is to drive value and instill confidence in financial planning. FPSC ensures those it certifies―Certified Financial Planner® professionals and FPSC Level 1® Certificants in Financial Planning―meet appropriate standards of competence and professionalism through rigorous requirements of education, examination, experience and ethics. There are approximately 18,500 financial planners in Canada who have met, and continue to meet, FPSC’s standards. More information is available at FPSC.ca and FinancialPlanningForCanadians.ca. Effective April 1, 2019, FPSC will become FP Canada™: a national professional body dedicated to advancing professional financial planning. Learn more at FPCanada.ca.
For more information, please contact:
Financial Planning Standards Council
416.593.8587, ext. 232 or 1.800.305.9886