Independent research validates CFP® certification standard


A research study into Australia’s financial planning industry comprehensively supports the CERTIFIED FINANCIAL PLANNER® certification standards of education, experience and ethics.

Conducted by Dr June Smith through Victoria University, the research: Ethics and financial advice: the final frontier, looks at ethical and professional issues associated with the provision of financial advice in Australia. The research represents one of the first studies of its kind in the world.

The study revealed a real reputation risk for financial advisory firms that cannot ensure their planners can meet ever increasing ethical and conduct standards.

Significantly, advisers who hold a professional designation or accreditation were found to have higher ethical reasoning levels than those who do not. In particular, CERTIFIED FINANCIAL PLANNER professionals had the highest level of ethical reasoning and as a result are best prepared to face complex ethical dilemmas in daily practice.

“Ethical conduct and behaviour are pivotal to the ability of financial advisers to retain the trust and confidence of clients and to ensure quality financial advisory outcomes,” Dr Smith said. “Financial Planning, in particular, is also an emerging profession both within Australia and internationally, and requires a strong ethical context to meet stakeholder expectations concerning the conduct and behaviour of its participants.”

“The findings in this study suggest that all financial advisers within the sector should be encouraged to join a professional association and undertake ethics training and education courses as part of an accreditation process.”

The study also recommends financial services organisations use CFP® practitioners in ethical leadership and mentoring roles and supports the move to a professional year in line with FPA standards.

In its new three year strategic plan launched in late 2010, the FPA proposed that from July 2013, new members require an approved undergraduate degree (or higher) qualification and undertake a supervised professional year program to ensure they earn the right to represent FPA professionals in the community.

“As this research concludes, the Future of Financial Advice reforms (FOFA) are just a first step in raising  the conduct and professional standards within the financial advisory sector,” FPA CEO Mark Rantall said.

“Higher educational standards, adherence to a professional Code of Ethics and exposure to professional obligations raise industry standards and best protect the financial future of all Australians.”

For a copy of the research report please click here.

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