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We are fast approaching the FPE1® and FPE2® examinations, which are scheduled for June 9, 2012. On both exams, you are responsible for knowing and being able to apply the FPSC Code of Ethics.

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.

1. I Integrity
2. O Objectivity
3. C Competence
4. F Fairness
5. C Confidentiality
6. P Professionalism
7. D Diligence

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
  NS Notice/ Supervise


 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:

Memory Aid

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
Nova Scotia

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.

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Good luck on your studies and on your upcoming examinations.

Sincerely,

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.


Note: Advocis does not award the CFP® and Certified Financial Planner® designation. The right to use the marks CFP®, CERTIFIED FINANCIAL PLANNER® and CFP(logo) is granted under licence by FPSC to those persons who have met its educational standards, passed the FPSC's Certified Financial Planner Examination, satisfied a work experience requirement, and agreed to abide by FPSC Code of Ethics.