Chapter 17: Professional Skills

Question 1

How many regulatory organizations impact the business of financial planning and financial advice?

Answer 1

According to Advocis, there are more than 100 different regulatory organizations that impact financial planning.

Question 2

What has FP Canada shifted the focus of financial planning from and to?

Answer 2

From financial planning being a largely technical skill to a more behavioural one.

Question 3

What are FP Canada’s Standards of Professional Responsibility broken down into? (4)

Answer 3

1. Code of Ethics
2. Rules of Conduct
3. Fitness Standards
4. Practice Standards

Question 4

What are the 8 principles laid out in FP Canada’s Code of Ethics?

Answer 4

1. Duty of loyalty to client
2. Integrity
3. Objectivity
4. Competence
5. Fairness
6. Confidentiality
7. Diligence
8. Professionalism

Question 5

What are FP Canada’s Rules of Conduct designed to do?

Answer 5

Provide FP Canada certificants with a clear set of rules to follow, covering more practice-based concerns, rather than ethical concerns.

Question 6

What are the Fitness Standards laid out by FP Canada?

Answer 6

Circumstances that would bar someone from holding out as a FP Canada certificant.

Question 7

What are the 4 categories of professional skills a financial planner must have?

Answer 7

1. Critical thinking skills
2. Interpersonal and relationship skills
3. Communication skills
4. Teamwork and collaboration skills

Question 8

What is the national body of securities regulations formed by each provincial securities commission?

Answer 8

CSA - Canadian Securities Administrators

Question 9

What is a somewhat common situation where a financial planner would be considered “soliciting unregistered securities”?

Answer 9

If a planner tries to help a client sell their business. What seems like an innocent connection between groups could actually be considered solicitation of unregistered securities.

Question 10

What are the 4 classes of licensing available for those who might be selling securities?

Answer 10

1. Mutual fund representative (CIFC/CSC)
2. Securities dealer (CSC and Conduct & Practices Handbook)
3. Exempt market representative
4. Portfolio manager (CIM/CFA)

Question 11

When was insurance licensing harmonized in Canada?

Answer 11

2016

Question 12

How are banks regulated in Canada?

Answer 12

Federally through the Bank Act.

Question 13

How are credit unions regulated?

Answer 13

Almost always provincially regulated, although there are two federally regulated credit unions.

Question 14

What is the downside and corresponding upside associated with credit unions?

Answer 14

No direct access to the Bank of Canada which results in more expensive access to capital. Corresponding upside is less regulation of activities compared to banking activities.

Question 15

How is privacy different from confidentiality?

Answer 15

Privacy is an individual’s right to control how his or her personal information is collected, used, and/or disclosed.

Confidentiality is the duty to ensure personal information is kept secret, to the extent that it is possible.

Question 16

How many CE credits are required for CFPs and QAFPs? How many can be carried forward?

Answer 16

25 per year for CFP and 12 per year for QAFP. Up to 25 and 12 respectively can be carried forward.

Question 17

What is the difference between an employee and an agent?

Answer 17

Employee is likely paid, trained, hired, evaluated, promoted, and provided benefits by the firm. Liability is treated under the principle of vicarious liability, employer is liable for employee’s actions while doing their job.

An agent on the other hand, holds all liability for their actions.

Question 18

What is DNCL and CASL?

Answer 18

Do Not Call List and Canadian Anti-Spam legislation, both designed to reduce unwanted commercial solicitation. DNCL refers to phone calls and CASL refers to email.