8 Traits of an Ethical Financial Planners

Written by

staterafp

Published on

October 26, 2023

So you have made the decision you are wanting to expand your professional network and find someone who can help you with your financial well-being, that's great! You've hear that financial planners are a great resource to help create financial security now and for your future, so you begin the search to find one. Not just one, but the right one; the one who puts your best interests first and has the knowledge across a broad range of considerations to bring value to your situation.

However, if you think finding an ethical financial planner is simply a matter of Googling for one, think again. It's crucial you always do your due diligence, with any professional, to ensure they truly have your best interests in mind with the education and morals to back it.

The first thing you want to consider, is there are designations and education pertaining to this specifically. Don’t just find someone who calls themselves a financial planner, search for one with the Certified Financial Planner^® (CFP) designation. These professionals go through a rigorous program of education, examinations and work experience to prove their worth. Other designations they hold can also increase their knowledge and understanding of your financial wellbeing, so be sure to research any letters that reside behind an individuals name.

CFP professionals not only complete immense ongoing education to maintain their status, but they also must adhere to the eight-point FP Canada Code of Ethics that emphasizes accountability, to the public, clients and colleagues.

Here are the principles that you can use to help find the right professional to help secure your financial future.

1. Put Clients' Interest First

Top of the list is a written obligation to put clients’ interests first at all times—even if there are differences in compensation for selling one product over another. To maintain certification, every CFP professional must re-attest to this principle annually and agree to be bound by it and accountable.

2. Act With Integrity

Trust and confidentiality are cornerstones of integrity. A CFP professional must uphold the principle of integrity at all times, inspiring confidence and upholding a strong moral compass. You’re entrusting your financial future to your planner. It’s only right they be held to the highest ethical standard.

3. Be Objective

Objectivity means keeping emotions, personal bias and competing priorities out of the decision-making process. CFP professionals make recommendations based on sound knowledge, strong judgement and a full understanding of their clients’ goals and objectives.

4. Maintain Competence

It’s not enough to qualify for CFP certification just once in a lifetime. In addition to meeting demanding certification requirements, CFP professionals must keep their skills up-to-date and develop additional knowledge throughout their career. This enables a CFP professional to provide effective advice and service to clients as the financial environment evolves and individual circumstances change.

5. Be fair and Open

Fairness is about impartiality and disclosure. CFP professionals must be honest and objective, providing advice and planning without regard to compensation, bias, employer or any other interests. They must also communicate at a level that’s understandable to clients. When you begin working with a CFP professional, he or she will clearly and transparently communicate to you the services to be provided, any potential conflicts of interest they’re aware of, how they’ll be compensated and what you can expect from the relationship.

6. Maintain Confidentiality

As electronic data storage becomes more pervasive, the protection of private information is critical. A CFP professional is bound to ensure the protection of all client data regardless of how it is stored or delivered. That includes digital and paper files and correspondence, as well as verbal discussion.

7. Act Diligently

Diligence is about being mindful when guiding, informing, planning and delivering financial advice and services to clients. Circumstances can change quickly in your life and the world around you. A CFP professional has the knowledge and ability to respond effectively to those changes and help motivate you to take actions that will help you reach your financial goals.