Code of Ethics
Advocis Code of Professional Conduct
As a condition of membership in Advocis, all members agree to abide by the Advocis Code of Professional Conduct (CPC).*
- Priority of Client's Interest — An Advocis Member shall act in a client's best interests
- Integrity — An Advocis Member shall act with integrity
- Competence — An Advocis Member shall act competently
- Diligence — An Advocis Member shall act diligently
- Disclosure — An Advocis Member shall act transparently
- Professionalism — An Advocis Member shall act in a manner that reflects positively upon all other Advocis Members
- Confidentiality — An Advocis Member shall respect and protect the privacy of others and the confidentiality of client information
- Respect for the Law — An Advocis Member shall act in accordance with the spirit and principles of the law
The CPC is part of an overall framework that includes Practice Standards, Best Practices Applications, and Disciplinary Procedures.
* Advocis Members who are authorized to hold the Certified Financial Planner (CFP®) designation are governed in the first instance by the Code of Ethics adopted by the Financial Planners Standards Council.
Advocis® and APA® are trademarks of The Financial Advisors Association of Canada. Financial Planners Standards Council awards the CFP® marks in Canada under licence agreement with the CFP® Board of Standards Inc.
Financial Planning Standards Council Code of Ethics
Guidance to FPSC Code of Ethics
In providing financial planning services to Canadians, CFP® professionals must conduct themselves with the highest ethical standards. All Certified Financial Planner® professionals and FPSC Level 1 Certificants™ in Financial Planning™ are required to abide by and be held accountable to the FPSC Code of Ethics contained within the Standards of Professional Responsibility for CFP Professionals and FPSC Level 1 Certificants in Financial Planning.
The Code is based on eight principles that recognize a CFP professional's and FPSC Level 1 certificant’s responsibilities to the public, clients, colleagues, employers and the financial planning profession.
FPSC rigorously enforces these principles and investigates complaints against CFP professionals and FPSC Level 1 certificants who are purported to have breached the Code. More information can be found in our Standards and Enforcement section.
A CFP professional shall always place the client’s interests first.
Placing the client’s interests first requires the CFP® professional to act honestly and to place the client’s interests ahead of his own and ahead of all other interests.
Principle 1 shows the requirement for a CFP professional to put the client’s interests ahead of any other, including his own. This principle is not a comment on any legal obligation associated with a fiduciary relationship that may or may not apply in any given CFP professional/client relationship.
In practice, CFP professionals are faced with many pressures: the needs of their clients; the expectations of their employers; the expectations of their managing general agency or dealers; and their own need to grow and maintain their business. Principle 1 clearly states that the CFP professional must place the client’s interests above these other competing demands.
In all client dealings, the CFP professional must consider the question, “What action would I take for myself if I were the client?”, and proceed based on that course. In so doing, the CFP professional protects the reputation of the profession, regardless of practices used at his place of employment.
CFP professionals must maintain an ethical practice, regardless of their manner of compensation or whether they are independent or part of a larger financial institution. Pressure can be great when an employer compensates more for the sale of one product over another or for referrals to others for sale of products; however, the Client First principle dictates that the CFP professional must still advise his client based on what is in the interest of the client ahead of what is in the interest of the employer or the CFP professional. This prioritizing the client is a fundamental core value of any profession.
When fielding complaints related to this principle, FPSC will examine all the competing interests faced by the CFP professional to ensure that the resulting action put the client’s interests ahead of other interests. When facing conflicts and potential conflicts, the FPSC® Financial Planning Practice Standards require disclosure of these issues to the client (and obtaining waiver from the client that the conflicts are understood and accepted, if necessary). It is strongly recommended that the CFP professional document the analysis, disclosure and advice.
A CFP professional shall always act with integrity.
Integrity means rigorous adherence to the moral rules and duties imposed by honesty and justice. Integrity requires the CFP professional to observe both the letter and the spirit of the Code.
The CFP professional is often placed by clients in a position of trust and confidence. The basis of this trust is the CFP professional’s personal integrity. Without integrity – the moral guidance that drives an individual to put honesty and candor ahead of personal gain or advantage – the client may not have sufficient faith and confidence in the CFP professional to implement the recommended strategies. In deciding what is right, a CFP professional should rely on his integrity to provide moral guidance.
Integrity does not eliminate legitimate differences of opinion with other CFP professionals or the client; however, integrity cannot co-exist with deceit, impropriety or any action that devalues one’s principles.
A CFP professional’s conduct should inspire the confidence, respect and trust of both his clients and the community, and bring credit to the financial planning profession as a whole.
One measure of whether someone is acting with integrity is if they would take the same action regardless of whether anyone else is watching or would find out. For CFP professionals, this means making recommendations as if every decision and action would be open to public scrutiny.
A CFP professional shall be objective when providing advice and/or services to clients.
Objectivity requires intellectual honesty, impartiality and the exercise of sound judgment, regardless of the services delivered or the capacity in which a CFP professional functions.
Being “objective” means demonstrating the ability to evaluate data and situations without letting one’s own emotions or competing priorities (such as compensation) interfere. Objectivity also encompasses creating recommendations based on a thorough knowledge of the client, sound analysis and strong judgement.
Regardless of the service rendered or the capacity in which a CFP professional functions, personal bias, undue influence and personal interest must never play a role in the way the CFP professional carries out his responsibilities.
Consider, for example, a situation where an employer has underwritten a new security issue and requests that the sales force sell its inventory. It is the responsibility of the CFP professional to focus on the client’s investment objectives when determining whether to recommend the new issue to the client. To focus primarily on the employer’s need to sell its inventory is to go against the principle of Objectivity (and that of Client First). In this example, a best practice would be for the CFP professional to disclose these issues and it is strongly recommended that the CFP professional document the analysis, the disclosure of conflict, and advice given.
Where a client directs the CFP professional to purchase a product, it is not a breach of the principle of Objectivity to recommend proprietary or firm-approved products provided the scope of product options is disclosed and the offered products satisfy the client’s objectives. For example, if a client asks to purchase a GIC in an amount that exceeds Canada Deposit Insurance Corporation (CDIC) limits, the CFP professional should advise the client of the CDIC limits; the potential risk of exceeding them; any limitations the CFP professional has in offering GICs from other providers; and alternate solutions that may satisfy the client’s objectives.
The CFP professional must be aware of his own biases and take steps to avoid having those biases influence his work with a client.
A CFP professional shall develop and maintain the abilities, skills and knowledge necessary to competently provide advice and/or services to clients.
Competence requires attaining and maintaining a high level of knowledge and skill, and applying that knowledge effectively in providing advice and/or services to clients.
To earn CFP certification, the CFP professional has demonstrated significant knowledge, skill and abilities to effectively collect, analyze, integrate and synthesize client information.
At a minimum to meet requirements, the CFP professional must maintain this knowledge and skill by keeping up with changes in economic, political and regulatory environments and any changes in the financial services industry and areas of specific technical knowledge. The CFP professional must then effectively incorporate these changes into the services provided to clients.
The CFP professional has made a commitment to continuous learning and professional development. This may take the form of relevant industry conferences, seminars, courses; research, writing, teaching or mentoring others; reading periodicals, journals and other sources of relevant information; or consulting with experts and industry peers.
There are many methods for a CFP professional to maintain and build competence throughout her career, which will allow her to maintain her ability to effectively serve her clients. Continuing education, though important, is but one method that should be considered.
Competence is not just about what knowledge the CFP professional has acquired and maintains, but is also about how she acts. Competence must be demonstrated in every client interaction. If, at any time, a CFP professional does not feel that she can adequately fulfill her obligations to a client, she must remove herself from that engagement either temporarily or on a permanent basis.
CFP professionals must fully consider available data when providing recommendations, and be able to justify going against prevailing data if the situation merits an alternative approach.
A CFP professional also knows the limits of her knowledge and skill and seeks advice from qualified professionals when specialized knowledge or expertise is required. CFP professionals are not expected to be experts in all domains that affect a client’s financial health, and must not represent themselves in this way. They are expected to work with knowledge gained from analysis and from experts to guide the client to solutions which meet the client’s objectives.
A CFP professional shall be fair and open in all professional relationships.
Fairness requires providing clients with what they should reasonably expect from a professional relationship, and includes honesty and disclosure of all relevant facts, including conflicts of interest.
Fairness requires impartiality and the disclosure of all facts by the CFP professional that are relevant to the client’s situation. The CFP professional must suppress his personal feelings, prejudices and desires in all professional dealings. This means treating others in the same fashion that one would want to be treated, which is an essential trait of any professional. The CFP professional must be honest and objective and provide advice and planning without regard to compensation, bias, employer or any other interests.
The CFP professional must communicate at a level that is understandable to each of his clients; this applies to all communications (oral or written). Where a conflict of interest is possible or could reasonably be perceived by the client, the client should be informed and accept the conflict. There may be situations where it is necessary for a CFP professional to withdraw his services and refer the client elsewhere.
Fairness does not necessarily mean everyone gets the same treatment but rather that clients get at least what a CFP professional acting responsibly would determine that they need and what the CFP professional committed to provide. The CFP professional must deliver on the service promise made in the Letter of Engagement. In addition, every client should get the best efforts of the CFP professional, within the limits of the engagement.
A CFP professional shall maintain confidentiality of all client information.
Confidentiality requires that client information be secured, protected and maintained in a manner that allows access only to those who are authorized. A relationship of trust and confidence with the client can only be built on the understanding that personal and confidential information will be collected, used and disclosed only as authorized.
It is the CFP professional’s duty to ensure the confidentiality of all client information. A CFP professional must not share any details about a client including the client’s identity without client consent. It is inappropriate for a CFP professional to share any information about a client’s financial or personal affairs, or to even mention a specific client by name to a friend or colleague without client consent
This responsibility to respect a client’s anonymity and privacy extends beyond the client engagement, unless the CFP professional is required by court order to share information about a client with the appropriate authorities or if the CFP professional has the written permission of the client to share her information with a third party.
The CFP professional must take all reasonable steps to protect all client documents and communications in whatever form they may exist. This includes secure storage of all client information and, when appropriate, maintaining privacy and confidentiality during the destruction or return of all records when they are no longer needed.
As more and more client information is electronically exchanged and stored, the CFP professional must take reasonable steps to protect client information from unauthorized access. For example, where electronic information is regularly stored on a laptop, a CFP professional must make every effort to ensure that the laptop cannot be compromised. This may be accomplished through encryption technology, passwords or other means designed to prevent public access.
Similarly, the CFP professional should be mindful of carrying on client discussions in public, over the internet and other wireless devices – in particular in public domains where other parties may overhear or intercept the conversation.
When communicating with the client by email, the client should clearly indicate that this mode is acceptable, particularly when sending sensitive or confidential information.
A CFP professional shall act diligently when providing advice and/or services to clients.
Diligence is the degree of care and prudence expected from CFP professionals in the handling of their clients’ affairs. Diligence requires fulfilling professional commitments in a timely and thorough manner and taking due care in guiding, informing, planning, supervising, and delivering financial advice and/or services to clients.
Diligence requires a high degree of care and attention to detail in all client dealings. A CFP professional’s responsibility to be diligent extends throughout the client engagement and includes a thorough collection and analysis of client information; prudent evaluation of options; meaningful presentation of recommendations; proper supervision of staff; detailed vetting of possible referral sources; and the delivery of high value in all advice provided.
Work that is done carelessly, or delegated to a subordinate who does not have adequate qualifications or expertise, may lead to inaccurate analyses or compromised advice which may not meet the client’s expectations or needs. The CFP professional’s reputation will be negatively affected, as will that of the financial planning profession.
The CFP professional must be reliable and responsive to the client’s needs. Financial markets and the client’s own personal situation can change quickly, so it is important that analyses be completed and recommendations implemented in a timely fashion.
For example, where a client is underinsured, the CFP professional should make it a priority to bring this to the client’s attention and recommend the purchase of appropriate coverage. Where a client requests an immediate redemption of capital from an investment portfolio, the CFP professional should take care to fulfill the order as requested to avoid unexpected taxes or costs related to a delayed response. When a CFP professional has an ongoing mandate, the CFP professional must proactively address the changing needs of each client’s personal situation as well as the changing needs resulting from external situations.
Diligence also refers to the opportunity for CFP professionals to educate clients about the value of financial planning and the importance of engaging in sound financial practices and behaviours to meet their financial goals. Although it is ultimately the client’s decision to follow the offered advice, the CFP professional should take efforts to motivate the client to take actions that will ultimately benefit the client.
A CFP professional shall act in a manner that reflects positively upon the profession.
Professionalism refers to conduct that inspires confidence and respect from clients and the community, and embodies all of the other principles within the Code.
Professionalism is the end result of following all of the principles in the Code. Beyond the expertise required to practice in a particular field, it is the high standards of ethics, behaviour and service, and the manner in which the service is delivered, that set an individual apart as a professional.
A professional takes pride in his work and strives to always do the right thing, regardless of the type of business, their particular job function, corporate title, or compensation method. Inherent in Professionalism is a sincere desire to help clients achieve their goals and to focus on “the greater good”. True professionals are continually focused on providing high quality planning, advice and service.
Professionals are always committed to act for the interests of others and are unselfish in their motives. They must be truthful, telling clients what they need to hear, not simply what they want to hear. They are always respectful. A professional uses his intellect to develop ideas and to present them in a way that clients understand. Professionals represent their employers, fellow workers and professional associations with the utmost dignity and positively promote their field in the eyes of the public.
Maintaining a professional credential such as CFP certification represents a commitment to maintaining the characteristics of professionalism and a commitment to representing financial planning as a recognized profession.
Million Dollar Round Table Code of Ethics
Members of the Million Dollar Round Table should be ever mindful that complete compliance with and observance of the Code of Ethics of the Million Dollar Round Table shall serve to promote the highest quality standards of membership. These standards will be beneficial to the public and the insurance and financial services profession.
- Always place the best interests of your clients above your own direct or indirect interests.
- Maintain the highest standards of professional competence and give the best possible advice to clients by seeking to maintain and improve professional knowledge, skills and competence.
- Hold in strictest confidence, and consider as privileged, all business and personal information pertaining to your clients’ affairs.
- Make full and adequate disclosure of all facts necessary to enable clients to make informed decisions.
- Maintain personal conduct which will reflect favorably on the insurance and financial services profession and the Million Dollar Round Table.
- Determine that any replacement of an insurance or financial product must be beneficial for the client.
- Abide by and conform to all provisions of the laws and regulations in the jurisdictions in which you do business.