Ethics in Financial Planning

Ethics in Financial Planning

Ethics in Financial Planning

Code of Ethics

When you enter the premises of any company, you will find some displays which have the words, ‘Code of Ethics’ proudly conveying the practices followed in the company.Do you know why many companies display the ‘Code of Ethics’?

Code of ethics is something that builds trust in a person. It gets in him the confidence while dealing with others. Code of ethics defines the acceptable behaviour and also promotes high standards of practice.

Do we, as individuals too have code of ethics?Code of ethics means certain general standards followed uniformly by all professionals engaged in the same profession. However, one must know the difference between code of ethics and code of conduct. The former are certain standards which have to be voluntarily followed by the members of theprofessional body and the latter are enforceable rules.In short, code of ethics should be followed voluntarily by a professional in the interest of himself and his client.

Code of ethics is needed:

1. As a tool of professional maturity and identity

2. As a framework for professional responsibilities

3. To define an acceptable behavior amongst professionals

There are certain codes of ethics that are laid by the Financial Planning Standards Board (FPSB), India, which we will deal with in the later parts of this unit

Investment Ethics

It is a must on the part of the financial planner to maintain certain code of ethics. It is also important for him to take care of the investment ethics as well.

We all know that every relationship manager (RM)/financial planner has certain targets to be fulfilled by the end of month/quarter/year.

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Most of the times, RMs and financial planners, do so by getting the client to invest into those financial planning products, the targets of whose is yet to be met with.It is the responsibility of the financial planner to suggest and invest in only those investments which are actually beneficial for the client. Ethics in financial planning makes an investor happy. A happy investor means more business for the company.

Compliance Angle in Financial Planning

We have discussed the various components of financial planning in previous units. Financial planning involves: Banking, such as, managing savings bank account, fixed deposit and so on Investments in mutual funds, stocks, bondsInsurance plans such as, traditional and Unit Linked Investment Policies (ULIPs)One should remember that each of these organisations is governed by certain regulatory bodies. These regulatory bodies too have certain set of rules and regulations that one has to adhere to. This legal framework is what is known as compliance. The compliance angle in financial planning involves adherence to the procedures of investment, following the guidelines. It also involves complying with the certification requirements as applicable to the financial planner.

Code of Ethics of Integrity

Members shall not give false or misleading advertisement about the size, scope and areas of competence in financial planning of their organisation.

Giving misleading information is not just distrust for the customer, but also a matter of shame for the bank. This will only get the bank a bad reputation.

Members shall not make any false statements and indulge in an act of dishonesty, deceit or fraud.

Code of Ethics of Objectivity, Code of Ethics of Competence, Code of Ethics of Fairness, these are important for companies ethics .

An ethical approach to financial planning is a must.

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Code of ethics defines the acceptable behaviour and also promotes high standards of practice.

Do we, as individuals too have code of ethics?Code of ethics means certain general standards followed uniformly by all professionals engaged in the same profession. However, one must know the difference between code of ethics and code of conduct. The former are certain standards which have to be voluntarily followed by the members of theprofessional body and the latter are enforceable rules.In short, code of ethics should be followed voluntarily by a professional in the interest of himself and his client.

Code of ethics is needed:

1. As a tool of professional maturity and identity

2. As a framework for professional responsibilities

3. To define an acceptable behavior amongst professionals

There are certain codes of ethics that are laid by the Financial Planning Standards Board (FPSB), India, which we will deal with in the later parts of this unit

Investment Ethics

It is a must on the part of the financial planner to maintain certain code of ethics. It is also important for him to take care of the investment ethics as well.

We all know that every relationship manager (RM)/financial planner has certain targets to be fulfilled by the end of month/quarter/year. Most of the times, RMs and financial planners, do so by getting the client to invest into those financial planning products, the targets of whose is yet to be met with.It is the responsibility of the financial planner to suggest and invest in only those investments which are actually beneficial for the client. Ethics in financial planning makes an investor happy. A happy investor means more business for the company.

Compliance Angle in Financial Planning

We have discussed the various components of financial planning in previous units. Financial planning involves: Banking, such as, managing savings bank account, fixed deposit and so on Investments in mutual funds, stocks, bondsInsurance plans such as, traditional and Unit Linked Investment Policies (ULIPs)One should remember that each of these organisations is governed by certain regulatory bodies. These regulatory bodies too have certain set of rules and regulations that one has to adhere to. This legal framework is what is known as compliance. The compliance angle in financial planning involves adherence to the procedures of investment, following the guidelines. It also involves complying with the certification requirements as applicable to the financial planner.

Code of Ethics of Integrity

Members shall not give false or misleading advertisement about the size, scope and areas of competence in financial planning of their organisation.

Giving misleading information is not just distrust for the customer, but also a matter of shame for the bank. This will only get the bank a bad reputation.

Members shall not make any false statements and indulge in an act of dishonesty, deceit or fraud.

Code of Ethics of Objectivity, Code of Ethics of Competence, Code of Ethics of Fairness, these are important for companies ethics .

An ethical approach to financial planning is a must. Adherence to the rules and regulations, systematic and ethical approach to serve the financial planning needs of the client is crux of customer satisfaction and delight.

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Comments

0 # Rohan 2017-10-08
Is there any age restriction applicable to apply to the B. Ed course, plz suggest good b.ed colleges in Durg as well
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0 # Jagan 2017-10-09
Most NCTE recognized institutions from across the country require that applicants must have completed at least 18 years of age in the year of admission, some b.ed colleges in Durg are Bhilai Maitri College ; Department of Education, Shri Shankaracharya Mahavidyalaya
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0 # Vaibhav Older than three months
I belong to Ahmadnagar, plz tell me As per 2016 ranking, which is the best MBBS college in India
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0 # Shruti Older than three months
The first position is held by Delhi AIIMS, followed by Vellore’s Christian Medical College, AFMC, Pune, Maulana Azad Medical College, Delhi and the fifth position is held by the GGMC & SIR J.J. Hospital in Mumbai, you can also find some good colleges in Ahmadnagar- Pravara Rural Medical College ; Padmashri Dr. Vithalrao Vikhe Patil Foundations Medical College ; Rural Medical College
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0 # Aarush Older than three months
Hello, I am from Fatehgarh, tell me How can I check whether a B.Ed college is approved by NCTE or not?
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0 # Mukesh Older than three months
Once you have decided to do your B. Ed from a particular college, you can visit the website of NCTE and can check whether the institution is under the list of approved institution,you can find here find list of NCTE approved b.ed colleges in Fatehgarh- B.Ed in Fatehgarh
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0 # Lakshay Older than three months
Hii, I am from Rupnagar, please tell me the duration of B.Ed course
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0 # Pallavi Older than three months
Hello, Good to see that you are from Rupnagar, the duration of B.Ed course is 2 years
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0 # Tushar Older than three months
Hii, I am from Kota, I have completed 12th in science stream, looking career in engineering,Tell me about the fee details of best engineering colleges
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0 # Jagan Older than three months
hii, good to see that you are from Kota, There are very good career opportunities in engineering, you have taken very good decision, but if we talk about fee of best colleges its depend on college to college but the range is Rs. 50,000 to 1,50,000 per year
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0 # Vaibhav Older than three months
Hi, I want to know the type of questions asked in CAT Written test, also tell me is there any good MBA college in Gandhinagar
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0 # Jagan Older than three months
There are three type of questions in CAT exam i.e. quantitative aptitude, data interpretation and verbal and reading comprehension, there are various MBA colleges in Gandhinagar- National Institute Of Co-Operative Management (Nicm) ; Sikkim Manipal University - Gandhinagar ; Institute Of Petroleum Management ; S.K. Patel Institute Of Management & Computer Studies
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