The Financial Planning Standards Council’s Standards Panel proposed on Aug 9 various amendments to the Standards of Professional Responsibility for CFP Professionals and FPSC Level 1 Certificants in Financial Planning. Included among these proposals is the introduction of a “Duty of Loyalty” in the Code of Ethics to replace the existing “Client First” principle.

“The Duty of Loyalty would enhance 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,” says the FPSC.

Reflects commitment to professionalization

This standard would “better reflect the notion of acting in the client’s best interest, and reflects FPSC’s commitment to the professionalization of financial planning in the interest of Canadians,” says the organization.

Among the other proposed amendments, the Standards Panel has proposed a prohibition on lending to clients and borrowing from clients.

Changing needs and expectations

“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.”

The proposed amendments have been released for consultation. Stakeholders may provide comments in writing to [email protected] until Sept. 14. Learn more about the proposed amendments and consultation on the FPSC’s website.