new rules / sefa ozel

The FP Canada Standards Council is consulting on proposed conduct rules related to conflicts and trusted contact persons that mirror rules in the securities space.

Under the first proposed rule, a financial planner would be prohibited from acting as an estate trustee, executor or power of attorney for property, or knowingly be named as a beneficiary for a client, while continuing to provide financial planning advice or services to that client, a release said. (The rule relates to clients who are not immediate family members.)

The Standards Council has seen an increase in cases involving financial planners acting in their professional capacity and, at the same time, in one of the specified roles, the release said.

The second proposed rule aligns with enhanced know-your-client requirements in the securities space under the client-focused reforms — specifically, the requirement to take reasonable steps to obtain the name and contact information of a trusted contact person (TCP) for clients, as well as clients’ consent to contact the TCP in cases such as potential financial exploitation or mental capacity concerns.

The proposed rules underscore the Council’s commitment to ensuring financial planning professionals put clients’ interests first, the release said.

The Standards Council also announced consultations on proposed updates, for relevance and clarity, to the standards of professional responsibility, after receiving feedback from financial planning professionals and compliance representatives.

In addition, a new “monitor and review” practice standard was proposed: if a financial planning engagement includes ongoing monitoring, reviews should be held on a regular basis, and any revised assumptions or recommendations resulting from these reviews should be documented and incorporated in an updated financial plan, the release said.

The consultation period for the proposed changes ends Dec. 5.