Home | Login | About Us | Contact Us | Downloads | Sitemap
Karvy Distribution Logo
Mutual Funds Fixed Deposits Bonds IPOs Financial Planning Tax Planning
About KFP
Services
Risk Profiler
Calculators
Best Practices
FAQs
Glossary


  Financial Planning

Financial Planning  
home > Financial Planning > Best Practices
logo   BEST PRACTICES
   
  Financial Planning Standards Board has defined the practice standards and the ethics standards for CFP professionals. So a financial planner should essentially also follow these standards when practicing as a financial planner. However it is best for a client to take advice from the FPSB certified financial planner. They are authenticated and are tested on their knowledge level also.
  Financial Planner professionals meet competency, ethics and professional practice standards based on an international platform of education, examination, experience and ethics/professional practice requirements (the 4Es). CFP certification standards for each country have been adapted to meet domestic marketplace, regulatory and educational needs.
  The board has defined the practice standards on the basis of the six steps of financial planning. They are discussed below:
   
bullet
1: Establish and define the relationship with the Client
 
Define the Scope of the Engagement:
The CFP professional and the client should mutually define the scope of the engagement before any personal financial planning service is provided. Details about each party's responsibilities, the time frames of the engagement, compensation, and conflicts of interest should be set out in writing in a formal engagement letter or letter of understanding, signed by both parties.
Hide
bullet
2: Gather client data
 
Determine a Client's Personal and Financial Goals, Needs and Priorities:
The CFP professional should identify the client's personal and financial goals, needs and priorities that are relevant to the scope of the engagement with the client before making and/or implementing any recommendations.

Obtain Quantitative Information and Documents
The CFP professional should obtain sufficient quantitative information and documents about a client relevant to the scope of the engagement before making and/or implementing any recommendations.
Hide
bullet
3: Analyse and evaluate the client's financial status
 
Analyze and Evaluate the Client's Information:
The CFP professional should analyze the information to gain an understanding of the client's financial situation and then evaluate to what extent the client goals, needs and priorities can be meets by the client's resources and current course of action.
Hide
bullet
4: Develop and present financial planning recommendations
 
Identify and Evaluate Financial Planning Alternative(s):
The CFP professional should consider sufficient and relevant alternatives to the client's current course of action in an effort to reasonably meet the client's goals, needs and priorities.

Develop the Financial Planning Recommendation(s)
The CFP professional should develop recommendation(s) based on the alternative(s) and the client's current course of action to reasonably meet the client's goals, needs and priorities.

Present the Financial Planning Recommendation(s)
The CFP professional should communicate the recommendation(s) in a way that allows the client to make an informed decision.
Hide
bullet
5: Implement the financial planning recommendation(s)
 
Agree on Implementation Responsibilities:
The CFP professional and the client should mutually agree on implementation responsibilities, consistent with the scope of the engagement.

Select Products and Services for Implementation: The CFP professional should select appropriate products and services that are consistent with the client's goals, needs and priorities.
Hide
bullet
6: Monitor the financial planning recommendation(s)
 
Define Monitoring Responsibilities:
The CFP professional and client shall mutually define monitoring responsibilities.
Hide
  Ethics standards defined by the FPSB board are discussed here below:
  CFP professionals' commitment to ethical standards, and enforcement of a Code of Ethics by FPSB Affiliates, is one of the principal ways that FPSB assures the public about CFP professionals' recognition of their commitment to clients, colleagues, employers, the profession of personal financial planning, and members of the public who place their trust in personal financial planners.
  By adhering to FPSB's Code of Ethics, localized by each FPSB Affiliate to comply with the practice requirements and regulations of a country or region, CFP professionals agree to provide personal financial planning in the best interests of clients and to act in accordance with the highest ethical and professional standards for the practice of personal financial planning.
  Before being authorized to use the CFP certification marks, and each time he or she renews his or her CFP certification, Financial planner professional must disclose whether he or she has ever been involved in any criminal, civil, self-regulatory organization or government agency inquiry, investigation or proceeding. At each certification renewal, financial planner professional must acknowledge the right of the FPSB Affiliate to enforce the Code of Ethics and proper use of the CFP marks.
  The seven principles of FPSB's Code of Ethics are:
 
  1. Integrity - Financial planner professional will always act with integrity.
  2. Objectivity - Financial planner professional will be objective in providing personal financial planning to clients.
  3. Competence - Financial planner professional will provide services to clients competently and maintain the necessary knowledge and skill to continue to do so in those areas in which the CFP professional is engaged.
  4. Fairness - Financial planner professional will perform personal financial planning in a manner that is fair and reasonable to clients, principals, partners, and employers and will disclose conflicts of interest in providing such services.
  5. Confidentiality - Financial planner professional will maintain confidentiality of all client information.
  6. Professionalism - Financial planner professional's conduct in all matters will reflect credit upon the profession.
  7. Diligence - Financial planner professional will provide services to clients in a prompt and thorough manner.
Karvy.com | About Us | Sitemap | Contact Us | Locate Us | Terms and Conditions | Disclaimer | * Best viewed in 1024 by 768 resolution *| © 2007 www.karvydistribution.com