A Principle Common To All Professionals

Submitted by - Professional Issues Committee

This chapter’s Professional Issues Committee continues to generate, share and implement ideas in support of the ongoing evolution of Financial Planning as a recognized profession. From engagement in the legislative process, where we work for the protection of the public in the delivery of financial services, to the launching of a book club to provide another venue for our members to grow professionally. All of these efforts augment the truly remarkable educational offerings generated by this chapter’s Program Committee and the Symposium Committee. All of these efforts are hallmarks of professionals who are striving to improve themselves to provide the best to their clients as well as maintain the integrity profession.

This commonality among our “allied professionals” (Attorneys, CPAs, CFAs etc), a clear commitment to a “standard of care” for the client comprises (along with the FPA Code of Ethics) the principles that apply to all Financial Planning Association (FPA) members. Our standard of care is straightforward:

  • Put the client’s best interests first.
  • Act with due care and in utmost good faith.
  • Do not mislead clients.
  • Provide full and fair disclosure of all material facts.
  • Disclose and fairly manage all material conflicts of interest.

It does not take a great deal of reflection to realize that this is not just about “good client service”.

If we introduce a single thought-provoking expression like “you cannot delegate understanding”, the professional demands on the Financial Planner quickly becomes more challenging. In committing to these standards, especially in a highly-regulated environment, the practitioner is responsible for much more than it appears. The intent and attempts to “do the right thing” for the client, may not be enough. Does the practitioner understand the process that his recommended investment managers are applying in the fulfillment of those “delegated” duties? Are the practitioners’ investment beliefs evident and consistent in the execution of the financial plan? Has the practitioner periodically challenged and validated those investment beliefs?

But Financial Planners are not alone in this regard. Our allied professionals (Attorneys, CPAs and CFAs) have their own standards of care and codes of ethics to which they have committed in serving their clients, protecting the public and maintaining the integrity of their profession. So, how do we “match up”? How would we even begin to compare? Given the differences in “academic” credentialing, is comparison among the allied professionals even possible; or necessary? Is this a “who cares more about…..” competition. Comparison is not the point; recognition of the need for and commitment to principles is the point. And we are being given an opportunity to review our professional principles and beliefs at our December 16 membership meeting, our annual “Allied Professionals” meeting.

On December 16, Tom Brakke a CFA and consultant to the investment management industry will address the topic “Investment Beliefs, Assumptions and the Standard of Care”. Tom will provide us the opportunity to think seriously about the obligations we have to our clients and our professional principles as we implement the financial plan and engage investments to meet the clients’ goals. The second part of Tom’s presentation will focus on a thoughtful process to help Financial Planners fulfill the obligation we have to perform the proper due diligence on investment managers who we engage. Remember, “ you cannot delegate understanding”.

We suggest that you invite your favorite Attorney, CPA or CFA to this session to show them how that common principle, “standard of care”, plays out in our business. That gives you the opportunity to learn about how those professionals understand and apply similar principles in their fields. It’s all about growing as a professional and earning the respect of the allied professionals and the public.