FAQ: Financial Planning
How does financial planning work?
Financial planning is a process that determines how you can best meet your life goals through the proper management of your financial affairs.
Key to effective financial planning is the ability to take into account all relevant aspects of your financial situation, and to identify and analyze the interrelationships among sometimes conflicting objectives. It is this unique integration of knowledge and skills across a broad range of topics that distinguishes professional financial planning from other related financial advice.
What do the letters “CFP” mean?
The letters “CFP” stand for Certified Financial Planner. The CFP marks identify individuals who are dedicated to the highest level of professionalism in providing financial planning advice. The CFP credential assures that the planner adheres to internationally recognized professional standards of competence and ethical practice as set in Canada by the not-for-profit Financial Planners Standards Council (FPSC). CFP standards include requirements in education, examination, experience and ethics – commonly known as the 4Es of professionalism.
Why is it important to deal with a CFP professional?
Most provinces do not regulate the use of the term “financial planner.” CFP certification is your assurance that your planner has completed a rigorous course of study approved by FPSC, passed the only independently developed national comprehensive examination (the CFP® Examination) for financial planning, and is committed to ongoing professional development and adherence to the professional CFP® Code of Ethics and CFP® Financial Planning Practice Standards developed and enforced by FPSC.
What standards guide the professional conduct of a CFP professional?
CFP professionals follow a professional code of ethics and practice standards described in detail in the brochure entitled: “What assurance do I have that financial planning works for me?”
The CFP® Code of Ethics requires each CFP professional to adhere to ethical and behavioural principles that ensure the client’s best interests are always placed first.
The CFP® Financial Planning Practice Standards describe what should happen during the financial planning process, providing guidance on how the CFP® Code of Ethics is practically applied in every financial planning situation each step of the way.
What is Financial Planners Standards Council (FPSC)?
FPSC is the not-for-profit organization dedicated to benefiting the public by leading the development of the financial planning profession in Canada. It sets, enforces and promotes the highest competency and ethical standards in financial planning as defined by individuals who have earned the CERTIFIED FINANCIAL PLANNER® (CFP®) credential.
FPSC grants the use of the CFP marks (CFP®; CERTIFIED FINANCIAL PLANNER®; CFP flame logo) to individuals who meet its standards. FPSC is supported by the following organizations whose members deal with the personal financial affairs of Canadians: Advocis; The Canadian Institute of Chartered Accountants; The Canadian Institute of Financial Planning; Certified General Accountants of Canada; Certified Management Accountants of Canada; and CUSOURCE® Credit Union Knowledge Network.
Does FPSC accept complaints against CFP professionals?
FPSC will respond to alleged violations of the CFP® Code of Ethics brought to its attention in writing. If a CFP professional fails to meet the high standards of the CFP® Code of Ethics, FPSC will take appropriate disciplinary action. The most severe of these actions is the revocation of the licence to use the CFP marks.
How can I be certain my financial planner is a CFP professional?
Look for the distinctive CFP certification marks: CFP flame logo, and the initials CFP or the words Certified Financial Planner. Only FPSC can authorize an individual to use these three marks in Canada. You can also check the “CFP Professionals in Good Standing” database or call FPSC at 416.593.8587 or 1.800.305.9886 to verify a planner’s status as a CFP professional.
How do I find a CFP professional?
Today, there are nearly 17,000 CFP professionals in Canada and almost 100,000 in 19 countries around the world. CFP professionals work in every segment of the financial services industry. Of course, every CFP professional has proven competence in all aspects of financial planning and must adhere to the CFP® Code of Ethics, be guided by the CFP® Financial Planning Practice Standards and meet ongoing requirements in continuing education. Yet, each CFP professional is as unique as you are. For example, many hold licences to sell a variety of products, have differing areas of specialization and work under different methods of compensation. So there is every reason to believe that you can find a CFP professional who can meet your needs today and tomorrow.
For more information on how to find a CFP professional that is right for you, consult “Finding a Planner” or contact FPSC at 416.593.8587 or 1.800.305.9886.
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