Code of Ethics - Synopsis of the Principles
Following are the Principles embodied in the Code of Ethics to which all CFP professionals must adhere. The Principles are statements expressing in general terms, the ethical and professional ideals of CFP professionals. For each Principle, Rules providing practical guidelines set standards of ethical and professional conduct that must be followed in particular situations.
FPSC has developed Financial Planning Practice Standards ("Practice Standards") that are directly linked to the Code of Ethics. These Practice Standards provide detailed direction to CFP professionals and information to consumers concerning the application of the Financial Planning Process within this Code of Ethics.
Principle 1: Integrity
A CFP professional shall always act with integrity.
CFP professionals may be placed by clients in positions of trust and confidence. The ultimate source of such public trust is the CFP professional's personal integrity. In deciding what is right and just, a CFP professional should rely on his or her integrity as the appropriate touchstone. Integrity demands honesty and candor that must not be subordinated to personal gain and advantage. Within the characteristic of integrity, allowance can be made for legitimate difference of opinion; but integrity cannot co-exist with deceit or subordination of one's principles. Integrity requires the CFP professional to observe not only the letter but also the spirit of this Code.
Principle 2: Objectivity
A CFP professional shall be objective in providing financial planning to clients.
Objectivity requires intellectual honesty and impartiality. It is an essential quality for any professional. Regardless of the particular service rendered or the capacity in which a CFP professional functions, a CFP professional should protect the integrity of his or her work, maintain objectivity, and avoid the subordination of his or her judgment, which would be in violation of this Code.
Principle 3: Competence
A CFP professional shall provide services to clients competently and maintain the necessary knowledge and skill to continue to do so in those areas in which the CFP professional is engaged.
One is competent only when one has attained and maintained an adequate level of knowledge and skill, and applies that knowledge effectively in providing services to clients. Competence also includes the wisdom to recognize the limitations of that knowledge and when consultation or client referral is appropriate. A CFP professional, by virtue of having earned the CFP designation, is deemed to be qualified to practice financial planning. However, in addition to assimilating the core competencies and knowledge required, and acquiring the necessary experience, a CFP professional shall make a commitment to continuous learning and professional development.
Principle 4: Fairness
A CFP professional shall perform financial planning in a manner that is fair and reasonable to clients, principals, partners, and employers and shall disclose conflicts of interest in providing such services.
Fairness requires impartiality, intellectual honesty, and disclosure of conflicts of interest. It involves a subordination of one's own feelings, prejudices, and desires so as to achieve a proper balance of conflicting interests. Fairness is treating others in the same fashion that one would want to be treated and is an essential trait of any professional.
Principle 5: Confidentiality
A CFP professional shall maintain confidentiality of all client information.
A client, by seeking the services of a CFP professional, expects to develop a relationship of personal trust and confidence. This type of relationship must be built upon the understanding that information supplied to the CFP professional will be confidential. In order to provide financial planning effectively and to protect the client's privacy, the CFP professional shall safeguard the confidentiality of such information.
Principle 6: Professionalism
A CFP professional's conduct in all matters shall reflect credit upon the profession.
A CFP professional shall behave in a manner that maintains the good reputation of the profession and its ability to serve the public interest. A CFP professional shall avoid activities that adversely affect the quality of his or her financial planning advice.
Principle 7: Diligence
Diligence is the provision of services in a prompt and thorough manner.
Diligence also includes proper planning for and supervision of the rendering of professional services.
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