Acting in roles such as estate trustee while providing financial planning advise or services would be prohibited
FP Canada says a financial planning professional should not be allowed to act as an estate trustee, executor, or a power of attorney for property for a client while also providing financial planning advice or services.
The standards body has opened consultations on two new Rules of Conduct for Certified Financial Planner professionals and Qualified Associate Financial Planner professionals designed to further protect consumers from conflicts of interest.
The first proposed rule would also prohibit certified professionals from knowingly being named as a beneficiary for a client while providing financial planning advice or services to them. The Rule would not apply when acting for an immediate family member.
The second proposed rule would require certified professionals to take reasonable steps to obtain the name and contact information of a Trusted Contact Person (TCP) for their client, as well as the client's consent for the planner to contact the TCP to confirm or make inquiries about any of the following:
- Concerns about possible financial exploitation of the client
- Concerns about the client's mental capacity as it relates to the ability of the client to make decisions involving financial matters
- The name and contact information of a legal representative of the client, if any
- If the client cannot be reached, the client's current contact information.
"The Standards Council has seen an increase in cases that involve FP Canada certificants providing financial planning advice while concurrently acting as a power of attorney for property, executor/trustee or being designated as a beneficiary for their client," said Damienne Lebrun-Reid, Vice President of Standards, Certification and Enforcement at FP Canada.
Practice Standards
FP Canada’s Standards Council is also inviting feedback on updates to the Practice Standards following an earlier survey of certified professionals and industry compliance representatives which revealed that most respondents feel the current Practice Standards are relevant and easily understood.
However, they also suggested that clarity could be improved in some areas and the Standards Panel said that a new Practice Standard, Monitor and Review, is appropriate and would remind CFP professionals and QAFP professionals that if the financial planning engagement includes ongoing monitoring, reviews should be held on a regular basis and any revised assumptions and/or recommendations resulting from these reviews should be documented and incorporated in an updated financial plan.
The consultation period on both the new Rules of Conduct and the Practice Standards is underway and will continue until December 5, 2023.
