In the last e-newsletter, I discussed the importance of learning the Financial Planning Standards Council Code of Ethics as well as the specific rules for each standard. The acronym that I used for the Code of Ethics is: I Owe Canada Five Cents Per Day.
I also mentioned an acronym for the rules for Standard 1, Integrity. Based on the key words of Fraud, Funds and Advertising, I mentioned having Integrity with a Fun, Fun Activity (FFA). To complete the rules, I suggested that the following template could be used to determine key words and themes for each of the seven standards. Those key words and themes are as follows:
|1. Integrity||FFA||Fraud/ Funds/ Advertising|
|2. Objectivity||PI||Prudent/ Interest|
|3. Competence||CS||Competence/ Scope|
|4. Fairness||DOC CH||Disclosure/ Outside/ Changes/
Contingency/ Human Rights
|5. Confidentiality||CSB EP||Consent/ Secrecy/ Benefit/ Employer/ Partners|
|6. Professionalism||FMIC||Fitness/ Marks/ Inform/ Criticism|
|RIA||Regulator/ Illegal/ Applicable|
|DQRH||Dignity/ Qualifications/ Records/ Harass|
|7. Diligence||NSP||Needs/ Suitability/ Products|
For example, for Rule 302 the word SCOPE describes the theme of the rule. A CFP professional must not give personal advice to clients because it is outside the scope of the professional relationship. For Rule 401, I identified DISCLOSURE as the key word or theme. A CFP professional must disclose any conflicts of interest to a new client when a financial planning account is being opened.
NOTE: While I am using one key word to help you remember the theme of each rule, it is crucial that you relate it to the complete rule. A key word is simply a memory technique, not a replacement for the whole rule. Also, the key words chosen are not set in stone.
So how do you remember all the letters that relate to the key words? While it is a bit bizarre, I came up with a story about a CFP professional attending an activity. The key words are:
|There is a||Fun Fun Activity|
|in the||Public Interest|
|it’s a||Canadian Seminar|
|speaking is||DOC Charles Howard|
|about how||Canadian Securities Benefit Every Person|
|and about||Financial Management In Canada,
Registered Investments and Annuities, and
Dealing with Questions Regarding Hostile clients
|and at the seminar|
|there is a||Nice Studious Person from
Numerous studies have shown that three keys to learning are: Association, Imagination and Motivation (AIM). The above memory aid takes this belief to heart. Feel free to come up with your own key words. What’s important is that you use a method of learning the Code of Ethics and applicable rules that works for you.
Good luck on your studies and on your upcoming examinations.
Ron Foran, CFP, CFA, CLU, FCSI
President, Foran Financial Institute
Ron Foran is the founder of Foran Financial Institute. He has lectured extensively for 25 years on investments and financial planning across Canada and globally. Ron has a passion for teaching, training and assisting students to pass exams and is the primary instructor for Foran securities and investment management seminars. If you want to learn more about Ron or Foran Financial Institute, please go to www.foranfinancial.com.