FP Canada introduces new rules and standards to protect clients and ensure ethical financial planning
The FP Canada Standards Council, a division of FP Canada, has announced amendments to the FP Canada Standards Council Standards of Professional Responsibility (Standards).
Julie Seberras, CFP, chair of the Standards Panel, emphasized the importance of evolving financial planning standards to meet the changing needs and expectations of Canadians.
She stated, “By reviewing these standards on a regular basis, we ensure that they remain relevant, no matter the landscape in which financial planners and their clients are operating.”
The updated standards include two new Rules of Conduct. The first rule mandates that CFP professionals and QAFP professionals inform clients about the role of a Trusted Contact Person (TCP) and take reasonable steps to identify if clients wish to name a TCP.
This rule aligns with Canadian Securities Administrators (CSA) measures and aims to protect clients from financial exploitation by ensuring planners have a trusted contact to reach out to if concerns arise.
The second new rule prohibits CFP and QAFP professionals from acting as an estate trustee, executor, or power of attorney for property, or from being named a beneficiary for a client while providing financial planning services, except when the client is a family member. This rule is designed to prevent conflicts of interest.
A new Practice Standard, “Monitor and Review,” was also introduced. It requires financial planners to conduct regular reviews if ongoing monitoring is part of the financial planning engagement.
Any updates to assumptions or recommendations should be documented and included in an updated financial plan, ensuring alignment with clients' current goals and needs.
Additionally, existing Practice Standards were updated for clarity and relevance, based on feedback from a consultation process with a working group formed by the Standards Panel.
Damienne Lebrun-Reid, vice president Standards, Certification, and Enforcement at FP Canada and head of the FP Canada Standards Council highlighted the significance of these updates.
She noted that the changes support CFP and QAFP professionals in providing high-quality financial planning services and are in the public interest, with a focus on protecting vulnerable clients and avoiding conflicts of interest.
CFP and QAFP professionals are encouraged to review the updated standards to understand their obligations.
These standards, enforced by the Standards Council and maintained by a panel of Certified Financial Planner professionals, licensed financial planners from Québec, and public members, are designed to uphold high levels of competence, professionalism, and ethical conduct.
The new amendments will take effect on June 1.
