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FP Canada Flashcards

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1
Q

Code of Ethics (8 Principles)

A
  1. Duty of Loyalty to the Client
  2. Integrity
  3. Objectivity
  4. Competence
  5. Fairness
  6. Confidentiality
  7. Diligence
  8. Professionalism
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2
Q

Duty of Loyalty to the Client

A

Principle 1: Duty of Loyalty to the Client
The Duty of Loyalty encompasses:
• The duty to act in the client’s interest by placing the client’s interests first. Placing the client’s interests first requires the Certificant place the client’s interests ahead of their own and all other interests;
• The obligation to disclose conflicts of interest and to mitigate conflicts in the client’s favour; and
• The duty to act with the care, skill and diligence of a prudent professional

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3
Q

Integrity

A

Principle 2: Integrity
A Certificant shall always act with integrity.
Integrity means rigorous adherence to the moral rules and duties imposed by honesty and justice. Integrity requires the Certificant to observe both the letter and the spirit of the Code of Ethics.

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4
Q

Objectivity

A

Principle 3: Objectivity
A Certificant 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 Certificant functions.

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5
Q

Competence

A

Principle 4: Competence
A Certificant 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.

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6
Q

Fairness

A

Principle 5: Fairness
A Certificant 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.

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7
Q

Confidentiality

A

Principle 6: Confidentiality
A Certificant 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 be built only on the understanding that personal and confidential information will be collected, used and disclosed only as authorized.

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8
Q

Diligence

A

Principle 7: Diligence
A Certificant shall act diligently when providing advice and/or services to clients.
Diligence is the degree of care and prudence expected from Certificants 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.

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9
Q

Professionalism

A

Principle 8: Professionalism
A Certificant shall act in a manner reflecting 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 of Ethics.

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10
Q

Rules of Conduct (35 in 10 categories)

A 
Rules of Conduct (5)
Discretionary Authority (5)
Client Relations (3)
Withdrawal of Services (3)
Client Property (1)
Professional Oversight and Supervision of Others (1)
Duties to Prospective Clients (2)
Financial Planning Services (7)
Duty of Confidentiality (3)
Relationship to FP Canada (5)
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11
Q

Practice Standard 1

Explain the Role of the Financial Planner and Value of the Financial Planning Process

A

PS.1 Explain the Role of the Financial Planner and Value of the Financial Planning Process
Ensure the client understands the role of a financial planner and the value of the process of financial planning in identifying and meeting the client’s personal goals, needs and priorities.

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12
Q

Practice Standard 2

Define the Terms of the Engagement

A

PS.2 Define the Terms of the Engagement
The Certificant will work with the client to define and agree on the scope of the financial planning engagement, whether an initial or review engagement.

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13
Q

Practice Standard 3

Identify the Client’s Goals, Needs and Priorities

A

PS.3 Identify the Client’s Goals, Needs and Priorities
Discuss the client’s personal goals, needs and priorities before identifying possible strategies or making recommendations.

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14
Q

Practice Standard 4

Gather the Client’s Information

A

PS.4 Gather the Client’s Information
Gather sufficient quantitative and qualitative information relevant to the engagement before making and/or implementing any recommendations.

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15
Q

Practice Standard 5

Assess the Client’s Current Situation

A

PS.5 Assess the Client’s Current Situation
Identify and evaluate the strengths and weaknesses in the client’s financial situation, perform required calculations, develop needed projections and analyze and integrate the resulting information relative to the client’s personal goals, needs and priorities.

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16
Q

Practice Standard 6

Identify and Evaluate the Appropriate Financial Planning Strategies

A

PS.6 Identify and Evaluate the Appropriate Financial Planning Strategies
Identify and assess the possible financial planning strategies to achieve the client’s personal goals, needs and priorities.

17
Q

Practice Standard 7

Develop the Financial Planning Recommendations

A

PS.7 Develop the Financial Planning Recommendations
Develop and prioritize recommendations to help meet the client’s personal goals, needs and priorities and aim to optimize the client’s financial position.

18
Q

Practice Standard 8

Compile and Present the Financial Planning Recommendations and Supporting Rationale

A

PS.8 Compile and Present the Financial Planning Recommendations and Supporting Rationale
Present the financial planning recommendations and supporting rationale in a way that allows the client to make an informed decision.

19
Q

Practice Standard 9

Discuss Implementation Action, Responsibilities and Time Frames

A

PS.9 Discuss Implementation Action, Responsibilities and Time Frames
Gain the client’s agreement regarding implementation actions, responsibilities and time frames. Stress the importance of a review and ongoing monitoring of the client’s situation relative to their personal goals, needs and priorities periodically and as needed based on material changes in personal or external circumstances.

20
Q

Practice Standard 10

Implement the Financial Planning Recommendations

A

PS.10 Implement the Financial Planning Recommendations

Complete the implementation actions for which the Certificant has assumed responsibility.

21
Q

Practice Standards (10)

A
  1. Explain the Role of the Financial Planner and Value of the Financial Planning Process
  2. Define the Terms of the Engagement
  3. Identify the Client’s Goals, Needs and Priorities
  4. Gather the Client’s Information
  5. Assess the Client’s Current Situation
  6. Identify and Evaluate the Appropriate Financial Planning Strategies
  7. Develop the Financial Planning Recommendations
  8. Compile and Present the Financial Planning Recommendations and Supporting Rationale
  9. Discuss Implementation Action, Responsibilities and Time Frames
  10. Implement the Financial Planning Recommendations
22
Q

Financial Planning Steps (6) and Corresponding Practice Standards

A
  1. ESTABLISHING the client-planner engagement (PS 1 & 2)
  2. GATHERING Client Information & DETERMINING Goals and Expectations (PS 3 & 4)
  3. CLARIFYING & IDENTIFYING multiple areas of need or opportunity (PS 5)
  4. DEVELOPING & PRESENTING the financial planning recommendations (PS 6, 7 & 8)
  5. IMPLEMENTING the financial planning recommendations (PS 9 & 10)
  6. MONITORING the financial plan
23
Q

Financial Planning Step 1

A

ESTABLISHING the client-planner engagement (PS 1 & 2)

  • overview
  • services, process & documentation
  • clarify clients’ responsibility
  • disclosure & LoE
24
Q

Financial Planning Step 2

A
  1. GATHERING Client Information & DETERMINING Goals and Expectations (PS 3 & 4)
    - the process
    - goals & expectations
    - values, attitudes & expectations
25
Q

Financial Planning Step 3

A
  1. CLARIFYING & IDENTIFYING multiple areas of need or opportunity (PS 5)
    - identify issues/opportunities specific to clients’ situation
26
Q

Financial Planning Step 4

A
  1. DEVELOPING & PRESENTING the financial planning recommendations (PS 6, 7 & 8)
    - client values & attitudes
    - client knowledge & experience
    - strategies
    - projections
    - considerations
    - present & review
    - collaboration with client
27
Q

Financial Planning Step 5

A
  1. IMPLEMENTING the financial planning recommendations (PS 9 & 10)
    - implementation plan
    - urgent matters
    - external deadlines
    - long-term plans
    - documentation
    - other services (do yourself or refer to others)
28
Q

Financial Planning Step 6

A
  1. MONITORING the financial plan
    - monitor & evaluate
    - review
    - changes in personal circumstances
    - changes in tax law & economic circumstances
    - dramatic changes trigger immediate review
29
Q

Competency Profile - Activities/Functions (3)

A
  1. Collection
  2. Analysis
  3. Recommendation
30
Q

Professional Skills (4)

A
  1. Professional Responsibility
  2. Practice
  3. Cognitive Skills
  4. Communication
31
Q 
Professional Skill 1
Professional Responsibility (6)
A

PS. 101 Conducts oneself in a trustworthy manner
PS. 102 Puts the client’s interests first
PS. 103 Demonstrates ethical judgment
PS. 104 Demonstrates honesty and impartiality
PS. 105 Recognizes limits of competence and
voluntarily seeks the counsel of and/ or defers
to other professionals when appropriate
PS. 106 Recognizes the public interest role of
the profession and acts accordingly

32
Q

Professional Skill 2

Practice (8)

A

PS. 201 Complies with all applicable laws and regulations
PS. 202 Follows professional standards
PS. 203 Uses reasonable judgment in areas not
addressed by existing practice standards
PS. 204 Maintains awareness of changes
in the economic, political and regulatory
environments
PS. 205 Engages in continuous professional
development to ensure knowledge and skills
remain current
PS. 206 Conducts appropriate research
when performing analyses and developing
strategies
PS. 207 Demonstrates the ability to act
independently in the performance of
professional activities
PS. 208 Exercises responsibility for own
and subordinates’ ability to deliver professional services

33
Q 
Professional Skill 3 
Cognitive Skills (6)
A

PS. 301 Applies mathematical methods or
formulas as appropriate
PS. 302 Analyzes and integrates information
from a variety of sources to arrive at solutions
PS. 303 Uses critical thinking to identify and
assess the strengths and weaknesses of potential
courses of action
PS. 304 Makes reasonable decisions when faced
with incomplete or inconsistent information
PS. 305 Demonstrates the capacity to adapt thinking
and behaviours
PS. 306 Demonstrates capacity to understand
the thinking and behaviour of the client

34
Q

Professional Skill 4

Communication (7)

A

PS.401 Practices active listening with clients
and others
PS. 402 In communications from clients and others, ensures proper understanding of all points being made
PS. 403 Establishes good rapport with clients and
others
PS. 404 Communicates in a manner understandable
to clients and others
PS. 405 Presents recommendations and strategies in a logical and persuasive manner
PS. 406 Deals effectively with concerns, objections and complaints
PS. 407 Respects differences of opinion and the decisions of the client

35
Q

Competency Profile Functions

1. Collection (6)

A

1.001 Identifies the client’s objectives, needs
and values that have financial implications
1.002 Identifies the documentation required
1.003 Identifies the client’s legal issues
1.004 Determines the client’s level of financial sophistication
1.005 Identifies material changes in the client’s personal and financial situation
1.006 Prepares information to enable analysis

36
Q

Competency Profile Functions

2. Analysis (5)

A

2.001 Analyzes the collected information to prioritize the financial planning areas
2.002 Considers interrelationships among financial planning areas
2.003 Assesses opportunities and constraints across
financial planning areas
2.004 Considers the impact of economic, political and regulatory environments
2.005 Measures the progress toward achievement of
objectives

37
Q

Competency Profile Functions

3. Recommendation (4)

A

3.001 Prioritizes recommendations to
optimize the client’s situation
3.002 Incorporates recommendations into
action steps
3.003 Determines the appropriate cycle of review for the recommendations
3.004 Determines the necessity to revise the recommendations

CFP Canada (5 decks)

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