Code of Professional Ethics

Preamble

The mission of The Society (“HKRFP”) is to foster the professional standards of financial planners and raise consumers awareness of the value of financial planning services, to act with integrity and objectivity. The members are committed to excellence and acting in the public interest. HKRFP has adopted the Code of Professional Ethics (“Code”) to require its members to conduct themselves appropriately and provide high quality services. The Code is also aimed to satisfy the requirement of the public and the business community for sound financial services to be provided by financial professionals. Financial planning professionals have obligation to maintain high standards of morality, integrity and technical competence.

Principle 1 – Priority of the public interest

A member shall act in the public interest.

Rule 101 – A member shall safeguard and act in the public interest.
Rule 102 – A member shall act with trustworthiness, integrity and objectivity.
Rule 103 – A member shall avoid anything that would tend to bring the profession of financial planning and HKRFP into disrepute.
Rule 104 – A member shall not misrepresent or denigrate another financial planner or the benefits, costs or limitations of any financial planning product.

Principle 2 – Client

A member shall act in the client’s interest.

Rule 201 – A member shall provide its service to meet her client’s best interest. He always owes his client a duty of care, honesty, and fidelity.
Rule 202 – A member shall, when engaged to provide financial planning services, be free of any influence, interest or relationship in respect of the client’s affairs which impairs the member’s professional judgement of objectivity.
Rule 203 – When the recommending and / or selling a service or product, a member’s sole concern should be the client’s best interest.
Rule 204 – Where a member becomes aware that any commission, fee or reward, may be earned for the introduction of a client, or as a result of advice to a client, the client should be informed in writing as far as possible.

Principle 3 – Confidentiality

A member shall not disclose any confidential information without expressed consent.

Rule 301 – A member shall not disclose or use any confidential information concerning the affairs of any client, employer, or former employer, except the disclosure is required by laws as described in Rule 305.
Rule 302 – If a member believes it would be in the best interests of the client or prospective client to disclose the client’s affairs with another professional, the member should first get permission from the client or prospective client to do so.
Rule 303 – Documents received from a client are the property of the client. A member must promptly return such documents upon client’s request.
Rule 304 – A member should not turn to his own personal advantage or to the advantage of a third party, information acquired in the course of her professional duties. A member should not only refrain from misuse of such information but should also refrain from acting in such a manner as might make it appear that he has misused such information.
Rule 305 – A member shall disclose a client’s information where disclosure by a process of law. A member is not forbidden from but only to such necessary extent, in disclosing a client’s information where properly acting in the course of his duties.

Principle 4 – Conflict of interest

A member shall not act for any client when there is conflict of interest and shall always avoid conflict of interest situations. A member may only in exception circumstances continue to act or provide services despite conflict of interest only after full and complete disclosure to the client and having prior acceptance of such acting by the client in writing.

Rule 401 – When recommending products, a member’s sole concern should be the clients’s best interest. Considerations of self-interest should not have any effect on member’s advice to the client or prospective client.
Rule 402 – A member shall inform a client of any business, connections, affiliations, and interests of which the client might reasonably expect to be informed.
Rule 403 – When recommending or selling a services or product, a member shall fully disclose in writing to the client any conflict of interest the member may have, or any fees, commissions or profits the member may receive regarding the service or product recommended.
Rule 404 – When selling a service or product, a member shall fully disclose in writing to the client any potential of interest the member may have, or any fees, commissions, or profit the member may receive regarding the service or product recommended or sold.

Principle 5 – Competence

A member shall provide services to clients only on matters within their competence.

Rule 501 – The financial affairs of a client or potential client may have accounting, investment, legal or taxation implications. A member can and should discuss matters having such implications but should neither represent that the member is in fact so qualified.
Rule 502 – In rendering a professional service for a client, a member shall not misrepresent or conceal any material limitation on the member’s ability to provide the type of service required by the concerned client.
Rule 503 – In recommending a product to a client, a member shall not misrepresent or conceal any material limitation on the product’s ability to meet the anticipated financial planning needs of the concerned client.

Principle 6 – Integrity

A member shall offer and provide services with integrity.

Rule 601 – A member shall identify and explain to the client all positive and negative aspects of his recommendations.
Rule 602 – A member has an obligation to provide complete and accurate information. A member should promptly correct a mistaken impression which the member knows, or ought to know, exits.

Principle 7 – Care and Diligence

A member shall provide services with care and diligence.

Rule 701 – A member has a legal and professional duty to meet the standard of care and diligence with no undue delay or dereliction of duties.
Rule 702 – In recommending products to a client, a member shall base the recommendations on sound professional assessments of the client’s present and future needs and fully explain the nature and possible consequences of any recommendations, particularly the related projected future results.

Principle 8 – Privacy

A member shall protect and respect the privacy of others.

Rule 801 – A member shall not sell client’s information to any third party.
Rule 802 – A member shall comply with privacy legislation.
Rule 803 – A member shall have adequate control systems to protect confidential information from error, loss and unauthorized access.
Rule 804 – A member shall only collect and use information for the particular purposes. Client’s information should only be disclosed after obtaining client’s expressed consent.

Principle 9 – Professionalism

A member’s conduct shall reflect positively upon all other members.

Rule 901 – A member has the duty to be aware of, to understand and abide by the Principles and Rules of the Code of Professional Ethics, Rules, Regulations, Professional Standards, Practice Standards and By Laws, as adopted from time to time, by HKRFP.
Rule 902 – A member shall provide all information regarding academic and professional qualifications, affiliations and other information as requested by HKRFP. Such information must not be misrepresented.
Rule 903 – A member is not allowed to opt out of his fiduciary responsibility even if he is not accepting the full responsibilities of a financial planning practitioner when taking an order for securities or insurance coverage, for example.
Rule 904 – A member should follow the highest professional and ethical standards if he is a multi-designation holder. The standards required for ethical behavior at all times go way above just the letter of the law.
Rule 905 – A member who has been found guilty or granted an absolute or conditional discharge of any criminal or similar offence which may cast doubt as to that member’s honesty, integrity, or professional competence, shall promptly inform HKRFP the full details of the case when the right of appeal has been exhausted or expired. In such cases, the member may be charged with professional misconduct by HKRFP’s Ethic Committee.
Rule 906 – A member shall immediately notify HKRFP if the member becomes bankrupt or is convicted of a criminal offence other than a traffic offence.
Rule 907 – A member shall not make public statements or comments which may be interpreted as representing HKRFP or its views, except when authorized to act as an “official spokesperson” for HKRFP.
Rule 908 – A member shall not obtain admission to membership by means of fraud or other irregularity. A member shall notify HKRFP immediately regarding a person who has obtained membership by means of fraud or other irregularity.
Rule 909 – A member shall immediately report to HKRFP any situation of which the member has sufficient personal knowledge and which the member thinks may be detrimental to HKRFP or the profession.
Rule 910 – A member engaged in the practice of financial planning is recommended to maintain adequate professional indemnity insurance.

Principle 10 – Promotional Activities

A member’s publicity and promotion activities should be objective and conform to the basic principles of clarity, decency, honesty, legality and truthfulness.

Rule 1001 – A member should not conduct any promotional activities in such a way or to such an extent as to amount to harassment or coercion of prospective clients.
Rule 1002 – A member is prohibited to conduct the following activities:
i. Create false, deceptive or unjustified expectations of favorable results;
ii. Make unjustified claims to be an expert or specialist in a particular field;
iii. Contain purported statements of fact which cannot be verified or which are misleading by reason of the context in which they appear;
iv. Contain any other representations that would be likely to cause a reasonable person to misunderstand or be deceived.

Principle 11 – Respect of the law

A member shall respect the spirit and the letter of the law.

Rule 1101 – A member shall comply with all relevant laws, regulations and standards of any governmental or other professional bodies with jurisdiction applicable to a member’s regular business activities, and advise HKRFP of any transgressions.
Rule 1102 – A member shall remain knowledgeable of the laws and regulations that apply at any time to the services that he is authorized to provide.

Principle 12 – Continuing Professional Development

A member shall strive to continue his professional development by maintaining and improving his knowledge, skills and competence in financial planning.

Rule 1201 – A member shall keep informed of all matters that are essential to the maintenance of his professional competence in his area of practice.
Rule 1202 – A member shall make his best efforts to improve his professional competence in his area of practice.

ENFORCEMENT

Enforcement and interpretation of the Principles and Rules shall be governed by the Rules and regulations of HKRFP. A member, or former member who, while a member, violated the principles and Rules of the Code of Professional Ethics may be subject to one or more of the following:

1. Permanent expulsion from HKRFP.
2. Permanent loss of the right to use the HKRFP designation or other rights.
3. Expulsion from HKRFP with re-application and re-qualification for new membership being required.
4. Temporary suspension of the right to use the HKRFP designation or other rights.
5. A written reprimand or censor from the President of HKRFP.
6. Fine.
7. Payment of compensation or damages.
8. Publication of such violation.
9. Entering such violation on the member’s personal records.
10. Additional continuing education or other remedial work.
11. Such other disciplinary measures as are deemed appropriate by HKRFP’s Ethics Committee.