Financial planner ethics

We’ve been talking a lot in class lately about the code of ethics for Certified Financial Planners. When I spotted this CBC article, I thought it was perfect for our discussion.

A Vancouver senior is suing her former financial adviser and his investment firm, claiming her retirement nest egg was decimated largely by excessive commissions her broker earned by purchasing risky investments she didn’t authorize.

There are a lot of issues here, and one I presented to the group was that the person who was responsible for making the investments for her was considered her “financial advisor”. There is always a risk of a conflict of interest, especially when your financial advisor makes commissions on selling you mutual funds. That’s why I’m personally in favour of fee-for-service financial planners, and why, if you hire me to help organize your finances, I won’t be trying to sell you anything other than my services.


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