fp_report_final_website

fp_report_final_website - HOLDING THE PURSE STRINGS...

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Unformatted text preview: HOLDING THE PURSE STRINGS: REGULATING FINANCIAL PLANNERS Written by: John Lawford and Janet Lo Public Interest Advocacy Centre 1204 - ONE Nicholas St. Ottawa, Ontario K1N 7B7 December 2009 2 Copyright 2009 PIAC Contents may not be commercially reproduced. Any other reproduction with acknowledgment is encouraged. The Public Interest Advocacy Centre (PIAC) Suite 1204 ONE Nicholas Street Ottawa, ON K1N 7B7 Canadian Cataloguing and Publication Data HOLDING THE PURSE STRINGS: REGULATING FINANCIAL PLANNERS 1-895060-93-1 3 Acknowledgement Financial support from Industry Canada to conduct the research on which this report is based is gratefully acknowledged. The views expressed in this report are not necessarily those of Industry Canada or of the Government of Canada. 4 EXECUTIVE SUMMARY Financial planning in Canada as a practice has evolved to the point where Canadian consumers generally are aware of the term “financial planner”. However, the exact content of “financial planning” services is not easy to determine from the point of view of the average Canadian consumer and this confusion is not helped by the financial services industry’s rather lax use of the term to describe portions of the discipline of financial planning that pertain only to investments. The Public Interest Advocacy Centre set out to determine Canadians’ familiarity with financial planning, but also to attempt to see it from the perspective of financial planners. To that end, we conducted interviews with stakeholders and crucially, focus groups with both financial planners and their clients. From this research emerged a portrait of financial planning in Canada that sees it largely mis-described by both those who claim to be financial planners and their clients, even though professional bodies for financial planners and some provincial regulation defines it fairly precisely. Generally, these bodies define financial planning as advice from an independent financial expert on the following six major financial determinants in life: Cash and debt planning Income Tax planning Investment planning Retirement and Financial Independence planning Insurance and Risk planning Estate planning Financial planners are expected under the standards set by the several financial planner organization standard to review all of these areas with clients and generally to provide a written financial plan, which is then periodically reviewed for accuracy given the changes of life a financial circumstances of the client over time. Financial planners also, however, may assist with “implementing” the financial plan. That is, they may assist with the purchase of investments to satisfy investment planning goals or may assist with or refer clients to agents for insurance coverage, to lawyers for wills and powers of attorney, etc. It is this “secondary role” of implementation that leads to questions of conflict of interest and disclosure to clients of remuneration arrangement for financial planners. and disclosure to clients of remuneration arrangement for financial planners....
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fp_report_final_website - HOLDING THE PURSE STRINGS...

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