Introduction to Professional Ethics

Question 1

What are the 5 steps to making ethical decisions?

Answer 1

1. Recognize
2. Analyze
3. Assess
4. Decide
5. Reflect

Question 2

What are ethics?

Answer 2

A set of principles that guide the decisions people make and the actions they do or do not take.

Question 3

How do morals differ from ethical standards?

Answer 3

Ethical standards are based on what is considered acceptable according to law, or to a particular region, culture, group, professional body, etc. Morals are individual standards of behaviour or beliefs based on what is right and wrong conduct.

Question 4

What (2) obligations do you have as a professional acting ethically?

Answer 4

Compliance-based obligations

Integrity-based obligations

Question 5

What are 3 common reasons why people struggle with ethical decisions?

Answer 5

1. Complexity - “right” decision may not always be clear
2. Urgency - ethical dilemmas may require quick decision making
3. Limited viewpoint - not consider impacts from all angles

Question 6

What must be relied on to guide behaviour where no rule or law exists for a situation?

Answer 6

Ethical principles

Question 7

What is the FPSC Code of Ethics?

Answer 7

8 principles guiding the conduct of FPs.

Question 8

What is the FPSC Rules of Conduct?

Answer 8

Rules that accompany the Code of Ethics and reflect the specific standards of conduct expected of FPs.

Question 9

What is the FPSC Fitness Standards?

Answer 9

Expectations that FP Canada has for the character of FPs.

Question 10

What are the FPSC Financial Planning Practice Standards?

Answer 10

Standardized steps to be followed in any financial planning engagement.

Question 11

What are the 3 reasons why a Code of Ethics is important?

Answer 11

1. Adhering to a common standard
2. Demonstrating both compliance and integrity
3. Earning the public’s trust and respect

Question 12

What are the 8 Principles of the Code of Ethics?

Answer 12

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

Question 13

Which conditions must be present for an ethical dilemma to exist?

Answer 13

1. A decision must be made between 2 or more choices
2. Both choices compromise at least one ethical principle
3. None of the options is ideal

Question 14

Is the regulatory system for the financial industry in Canada rules-based or principles-based?

Answer 14

Principles-based

Question 15

How do regulators safeguard consumers?

Answer 15

Establishing and implementing standards, practices, and codes of ethics.

Question 16

What are the two national self-regulatory organizations in the securities industry?

Answer 16

MFDA and IIROC. Work together along with CSA.

Question 17

What is CSA?

Answer 17

Canadian Securities Adminstrators. Formal group consisting of securities commissions in each province and territory that work together, share ideas, and collaborate on the development of rules and regulations.

Question 18

What are the two national SROs responsible for?

Answer 18

• Financial compliance
• Business conduct compliance
• Registration
• Enforcement
• Market surveillance

Question 19

What is the Canadian Council of Insurance Regulators (CCIR)?

Answer 19

Like the CSA, CCIR is made up of insurance regulators from across the country. Its mandate is to promote an efficient and effective insurance regulatory system.

Question 20

What is CISRO?

Answer 20

Canadian Insurance Services Regulatory Organizations. Inter-jurisdictional group of regulating authorities dedicated to developing consistent standards of qualifications and practice for insurance intermediaries. CISRO cannot enact legislation, but is a key advisor to government on regulatory issues.

Question 21

What is the purpose of FP Canada and the FP Canada Standards Council?

Answer 21

FP Canada was created to foster better financial health for Canadians and lead the advancement of professional financial planning. FP Canada Standards Council is dedicated to establishing and enforcing financial planning standards, setting certification requirements, and developing and delivering exams.