| Danial Norjidi |
HAVING professional standards and a code of ethics for financial planners is of paramount importance towards ensuring high standards of technical competence, fair dealing and integrity, as well as for building trust.
This was said by Joseph Kwok, the President of the Financial Planning Association of Singapore (FPAS), while delivering a presentation at the recent Financial Planning Day 2016 event organised by the Centre for Islamic Banking, Finance and Management (CIBFM) in collaboration with the Financial Planning Association of Brunei Darussalam (FPAB), with the support of Autoriti Monetari Brunei Darussalam (AMBD).
In his presentation titled ‘Putting Clients First’, he spoke about financial planners’ professional standards and code of ethics, while also sharing some case studies, before talking about the Singapore financial advisory industry.
On the topic of professional standards, he touched on what makes one a professional, and what differs them from other people who are selling insurance or investment products.
A professional, he said, is someone with specialised knowledge, as well as lifelong learning. “Today, we understand that things change and need to be updated, so a professional will endeavour to continue to learn new techniques and knowledge to keep up with professional standards.”
Joseph Kwok, President of the Financial Planning Association of Singapore (FPAS), delivering his presentation at the Financial Planning Day 2016 event – AZROL AZMI
“In addition, a professional has a high performance standard, and must strive to be the best in the field they are in.”
On why professional standards are needed for financial planners, he added, “Because the public and the business community rely on sound financial planning and advice, so financial planners have an obligation to maintain high standards of technical competence, fair dealing and integrity.”
In his presentation, Joseph provided examples using the professional standards of FPAS.
Professional standards reflect the commitment of members of the FPAS to meet a high standard of professional conduct, he said, adding that the professional standards apply to all situations where a member of the public engages a member of FPAS for the specific provision of financial planning services.
He highlighted that professional standards allow for accountability. “Professional standards are set standards of conduct for members and are enforceable. They may also be recognised by external bodies (such as regulators or the courts) as relevant standards for providing financial planning advice.”
He shared that Singapore’s monetary authority has incorporated some of the Financial Planning Professional Standards in the Financial Advisors Act.
Joseph then went on to underline that professional standards are enforced by the FPAS via disciplinary regulations.
“All members are subject to the FPAS’ Disciplinary Regulations,” he said. “Any alleged breach of the FPAS’ Professional Standards shall be investigated by an investigation committee appointed by the executive council, and if warranted, referred for further disciplinary action.”
Serious breaches of the professional standards may result in heavy penalties as stated in the Constitution of the FPAS or amendments made thereto, he said.
“So why do we need all these Professional Standards?” he asked rhetorically. “At the end of the day, all these professional standards are to ensure that financial planners put their clients on the top of the list.”
He went on to speak on 18 of the various rules under the FPAS’ professional standards.
One such rule was that of general conduct, where he said that, in the conduct of professional and business activities, a member shall not engage in any act or omission of a misleading, deceptive, dishonest or fraudulent nature.
Another of the rules was pertaining to disclosure statements to prospective clients. Under this rule, members are to ensure that prospective clients are clearly informed in writing about various aspects of the service rendered, such as the identity of the company or representative responsible for the advice given, and charges associated with the delivery of those services, to name a few.
He then spoke on the code of ethics for financial planners, saying that it is important to have a high ethical standard in order to gain the trust of clients and prospects. “To me, high ethical standards are perhaps the most paramount of them all.”
“It is the most paramount attribute of a financial planner,” he said. “You can be a very brilliant investment guy, but if you do not have a high code of ethics, there will not be trust built between the client and financial advisors.”
“Trust is the foundation of the planner-client relationship,” he said. “This is often overlooked by many planners. Some planners take serious risks cultivating and preserving trust through their communication practices, empathetic skills and competence.”
Speaking on how building on trust is advocated, he said, “Obviously, the code of ethics is one way of doing this.
“If you are able to demonstrate integrity, objectivity, fairness, professionalism, competence, confidentiality and diligence you will be putting your clients first, which is the first principle and you will be able to demonstrate a high level of professionalism to the clients.”
Joseph is currently an Independent Non-Executive Director and Audit Committee Chairman of 3 SGX main-board listed companies. He has more than 16 years of experience in the financial service industry, having had senior roles at a number of global financial institutions.
He is also an adjunct lecturer with Kaplan, teaching finance and business related subjects. He also provides corporate training to bankers from several Chinese banks like China Merchant Bank and Industrial Bank of China.
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