Ethics Cautionary Note
When exams from the June 2025 CFP exam administration were scored, several professional conduct/ethical issues were flagged in a significant number of candidate responses. While not all candidates provided responses that indicated ethical issues, we are addressing the identified issues here, as guidance for all candidates (not just for those who provided such responses). These issues, if they had occurred with an actual client, would likely have constituted breaches of the FP Canada Standards Council Standards of Professional Responsibility, which is set and enforced by the FP Canada Standards Council. And, as this guidance is applicable for both CFP professionals and QAFP professionals, references below to CFP professionals should be interpreted as referring to both groups.
1. Prudent and appropriate recommendations (Rule 23) and gathering the client’s information (Practice Standard 4 and 5)
CFP professionals must only make recommendations that are prudent and appropriate for the client (Rule 23 of the FP Canada Standards Council Rules of Conduct). As an example, when recommending any change to an investment strategy, a CFP professional
must consider all the client’s suitability factors. Prudent strategies and recommendations will take into consideration, among other factors, the client’s current situation, goals, needs, priorities, risk tolerances and time horizons
for each account.
When assessing the client’s current situation, a CFP professional should consider the client’s financial position; ability to manage financial emergencies; ability to meet their financial obligations; and their projected ability to meet their goals, needs and priorities (Practice Standard 5). It is also important to note that a client’s risk tolerance, risk capacity, or time horizon can change over time. Discussions should be held with the client and these factors should be revisited on a regular basis—particularly after major life events.
Financial planning professionals should review each of the Practice Standards contained in the Standards of Professional Responsibility - including Practice Standard 4, which requires that CFP professionals gather sufficient qualitative and quantitative information relevant to the engagement, as well as identify and resolve any gaps in information required before assessing the client’s current situation and making recommendations. A thorough discovery process can also help ensure the CFP professional’s implicit biases aren’t inserted into client recommendations and provide the client with advice that meets their specific goals.
2. Managing Conflicts of Interest (Rule 8)
CFP professionals have an obligation to disclose conflicts of interest in writing (Rule 8) and to mitigate conflicts in their client’s favour (Principle 1), which means resolving any conflict in a manner that puts the client’s interest first and ahead of the CFP professional’s interests. A conflict of interest is any interest that may adversely affect, or be perceived as adversely affecting, a CFP professional’s judgment or ability to put the client’s interest first. Potential and actual conflicts of interest must be disclosed to the client(s) in writing.
Where a conflict of interest arises during an ongoing relationship with a client, either between the client and the CFP professional or between clients in the case of a joint engagement, a CFP professional shall, immediately upon discovery of the conflict of interest, notify the client(s) in writing of the conflict. In such circumstances, the CFP professional shall cease providing services (acting in accordance with the provisions of Rule 14) unless and until the client makes the informed decision to continue with the engagement.
3. Maintaining objectivity (Principle 3)
A CFP professional must be objective when providing advice and/or services to clients. CFP professionals must also be aware of their own cultural and societal influences or personal experiences that can create generalizations or stereotypes and ensure they are not inserted within client recommendations, general tone, and language. Suggesting a single mother may not qualify for a mortgage, without first confirming facts such as income and liabilities, would be an example of inserting a stereotype.
4. Advise Only in Those Areas in Which the Certificant is Competent (Rule 26)
A CFP professional must only offer advice in those areas in which they are competent. They must recognize when their ability and/or authority to handle a client situation is limited, such as in the provision of legal advice or services, and must take steps to either confer with other professionals or refer the client to another professional for advice or assistance in a particular area. For example, a CFP professional should involve a lawyer or estate specialist to draft a will. A CFP professional should also ensure that a referred party has the appropriate qualifications, certifications and/or licenses (in good standing) to provide required services.
5. Prudent Steps to Preserve Security of Information and Property (Rule 33, Principle 6)
Acting in accordance with Principle 6 of confidentiality, a CFP professional must ensure proper internal controls are in place to secure the safe and confidential storage of client information, whether physically or electronically. For example, a CFP professional using artificial intelligence (AI) applications or other digital services must ensure its use does not compromise the security of sensitive or confidential client information.
To ensure that the integrity of FP Canada’s certifications is upheld, CFP professionals must be knowledgeable about, and adherent to, the principles, practice standards and applicable rules. Please refer to the Standards of Professional Responsibility for more detail.
