What standards guide the professional conduct of financial planning professionals registered with IFPHK?
By registering with the IFPHK, financial planning professionals commit to following a set of ethical and professional standards adopted by the IFPHK. These standards include the Code of Ethics and Professional Responsibility and Financial Planning Practice Standard. These Codes and Standards set a benchmark for financial planning excellence. They serve as a cornerstone to professionalism and provide a set of enforceable requirements for the IFPHK. However, the Codes and Standards are not meant to be used for third party liability.
Who has to abide by the IFPHK’s Code of Ethics and Professional Responsibility?
All financial planning professionals registered with the IFPHK are required to adhere to its ethical and professional standards. At each renewal, a financial planning professional of the IFPHK must acknowledge the right of the IFPHK to enforce its Code of Ethics and Professional Responsibility, and proper use of the CFP marks and AFP marks (applying to CFP certificants and AFP certificants only).
Why has the IFPHK revised the ethical standards for financial planning professionals in 2011?
The IFPHK has always had a Code of Ethics and Professional Responsibility. The revision of these professional standards provides members with a benchmark of expectation in professional planning practice. The IFPHK has a responsibility for ensuring that the ethical standards for CFP certification and AFP certification remain strong, enforceable and appropriate to the current regulatory and business environment. The IFPHK continually updates its ethical and professional standards to:
- Reflect changing regulatory and business environments
- Ensure ethical standards remain strong
- Ensure enforceability of ethical standards
- Present them in a manner easily understood by our members and the public they serve
What are the major changes to the ethical principles contained in the Code of Ethics and Professional Responsibility revised in 2011?
While many of the ethical principles remain unchanged, the IFPHK has added a new principle “best interest of clients” to the Code of Ethics and Professional Responsibility of 2011. Rules of conduct contained in Part II of the Code of Ethics and Professional Responsibility of 2011 are simplified. Rules that were difficult to enforce have been removed. New requirements such as self-reporting of professional suspensions and written disclosure statements have been added to the Rules.
Why does the IFPHK have to adopt the “best interest of clients” principle?
When we engage professionals they commit to working in our best interest and to base recommendations on our needs and our particular situation. Consumers have a right to expect the same professional commitment from their financial planners. The FPSB, the leading international financial planning standards authority for competent and ethical financial planners, believes acting in the best interest of clients is the hallmark of financial planning professionalism.
By adopting the principle the IFPHK expects financial planning professionals to;
- Put the interests of the client ahead of their own. This requirement applies in the selection of products and services regardless of compensation (fee or commission)
- Provide financial planning or material elements of the financial planning process, and recommend what they reasonably believe to be the best possible options available for their clients, within the business and regulatory setting in which they practice.
How does the IFPHK enforce the Code of Ethics and Professional Responsibility?
Part II – Rules of Conduct in the IFPHK’s Code of Ethics and Professional Responsibility, serves as the enforcement mechanism of the Code. The Code is actively enforced through an investigative and disciplinary process described in the Disciplinary Rules and Procedures. The IFPHK is committed to maintaining a disciplinary process that is fair to those financial planning professionals whose conduct comes under scrutiny.
Why does the IFPHK have to maintain a set of disciplinary rules and procedures?
The Disciplinary Rules and Procedures provide financial planning professionals with a fair and simple disciplinary process whenever the IFPHK uncovers evidence of potentially unethical conduct. As part of the process, the IFPHK provides a fair and objective investigation into each allegation, and determines the merits of the allegations based on the evidence provided. The Professional Ethics Review Board takes disciplinarily action against a financial planning professional when the evidence proves there has been a violation of the Code of Ethics and Professional Responsibility.
Can I lodge a complaint against a financial planning professional registered with the IFPHK?
Yes. The IFPHK has a formal process that enables complaints about financial planning professionals to be heard, evaluated and where appropriate, disciplinary action can be taken. Complaints that involve evidence of misconduct should be made formally. Please note that the IFPHK only has jurisdiction to deal with complaints about it and financial planning professional members only. It also does not have jurisdiction to award compensation to consumers.