Importance of ethics in Certified Financial Planner course

Importance of ethics in Certified Financial Planner course

Good financial planning is a necessary requirement for the smooth functioning of an organization. A profit making organization always endeavours to keep its functions running smooth without any problem. The problems created by the shortage and the mismanagement of the finances are the ones which most commonly affect its functioning and can even lead it to its bankruptcy. There have been many instances where big multi-national conglomerates have gone bankrupt due to their imprudent financial decisions. It is not that these were not having the best of financial planners or managers but due to over-ambitious and greedy nature. It is for this very reason that stress is laid on the ethics in the Certified Financial Planner course.

Ethics is one of the 4 Es of this financial planning certification, which is recognized world over for creating financial planners with demonstrate ability to manage the finances in the crucial financial sectors. The other three Es which are stressed in the Certified Financial Planner course are: Education, Experience and Examination. Education refers to obtaining a theoretical and practical knowledge of financial planning at the university level. That college or university shall be registered with the CFPBS. Experience refers to the work experience that an aspirant must have. The course requires one to have the experience of a minimum of three years in a capacity which directly related to some kind of financial planning. It is even better to have an engagement which is substantive and in-depth with that financial role.

Examination refers to the requirement of passing a 2 day, 10hour exam in financial planning. The topics covered in the exam are:

1. General Principles of Financial Planning

2. Insurance Planning and Risk Management

3. Employee benefits planning

4. Investment planning

5. Income tax planning

6. Retirement planning

7. Estate planning

The Ethics are also held to be quite sacrosanct to this course and it is not just for the purpose of obtaining the financial planning certification that these shall be duly considered but also for the purpose of maintaining ethical conduct throughout the practice of this profession. At the final leg of the certification process, the candidate must pass an ethics review and agree to abide by the standards outlined by the Board. Throughout the practice, the Certified Financial Planner is required to strictly adhere to the Code of Ethics and Professional Responsibility developed by the Board.

Ethics become vitally important, over and above the knowledge of finance, at all levels of working of Certified Financial Planner in an organization. These pertain essentially to act with utmost integrity without letting the greed take over you. It also pertains to offering financial services that are objective and based on the needs of the clients. This means that the client shall be shown the right way all times and shall never be misled to take such decisions or actions which can bring him disrepute. If the planner is found to have engaged in an unethical act, then suitable action can be taken against him by the Board.

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