cases is that patients say they were rushed or ignored or treated poorly. 6
It is, therefore, the relationship between the personal financial planning professional and the client that is a key contributor to success. It is not that doctors, lawyers, or personal financial planning professionals do not need to have achieved a high level of understanding and application relative to the demands of their field of study; it merely means that these professionals must also possess the ability to communicate, engage, and, on some level, care for their clients and patients. The act of communicating in personal financial planning is one that requires education, where the individual learns how to present complex areas such as investments in a way that is both accessible and relevant to each client.
Within any society, professions hold an extraordinary amount of power and influence. Members of this group have a specialized expertise that provides great value to the population as a whole. This value to society is inherently provided with little or no self-interest.7 This notion of specialization also creates an element of autonomy for the profession, as these individuals exercise authority in determining right and wrong relative to their service.8 Individuals within this profession have the responsibility to act in a competent, ethical manner that will be in the best interests of the greater population. Thus, a given trade or occupation must have professional ethics in order to be called a profession.
As Hughes suggests:
Not only do the practitioners, by virtue of gaining admission to the charmed circle of the profession, individually exercise a license to do things others do not, but collectively they presume to tell society what is good and right for it in a broad and crucial aspect of life. Indeed, they set the very terms of thinking about it. When such a presumption is granted as legitimate, a profession in the full sense has come into being. 9
Within this license to which Hughes is referring, practitioners in a given profession must have the highest level of competence in serving the public as well as specific guidelines relative to ethics and professional conduct. This competence and ethical conduct is recognized as valuable to the general population. Without this recognition from the public, the profession would likely be unsustainable.
Almost all professions have some sort of code of ethics. The first profession to establish a modern code of ethics was medicine in the eighteenth century.10 The medical profession developed these codes to ease internal strife among members of the profession as well as to raise the status of the profession as a whole. The profession felt the need to defend itself from fraudulent individuals who misleadingly characterized themselves as medical experts. Ethical codes most often occur in writing and generally develop after a profession becomes organized. These codes require that the individual maintain a higher level of standards than what is required by law.11 The requirements are not developed in isolation, but rather with the objective of service to the population as a whole. These codes outline how professionals are to pursue a common cause with minimal cost to themselves or to the general population.12 The requirements also evolve based on events, such as government law and economic and social changes in the environment. For example, in medieval England, in response to growing hostility toward the legal profession, regulation of the legal profession began with adoption of a series of requirements to curb incompetence, unethical practices, and conflicts of interest.13 It is important to note that a code also protects members from certain pressures, such as cutting corners, cheating, or other forms of misconduct. A code of ethics is a guide to the professional, and the profession at large, concerning certain practices and expectations regarding aspects of one’s service to the population as a whole. Practitioners in a given profession benefit from a code of ethics that is required of their members, and therefore they should follow this code for the benefit of the entire group of professionals. Further, professionals must adhere to the code of conduct or be subject to discipline.
Financial planning contains a set of Standards of Professional Conduct that outline the ethical standards for CFP® professionals. The CFP Board’s Code of Ethics expresses the professional’s recognition of his or her “responsibilities to the public, to clients, to colleagues, and to employers.”14 Given the important responsibilities of the personal financial planner, the CFP® professional must adhere to a variety of rules of conduct in order to serve the public in a competent, ethical manner. It is not enough, however, to merely have a code of ethics; it is vital that there exists evidence of enforcement of this code as well.
Individuals within a profession must identify themselves as part of that profession. The objective of service to the general population and the notion of competence and ethical responsibilities associated with such service become a guiding philosophy to members of a given profession. Practitioners in a given profession, therefore, identify themselves as service-oriented, competent, and ethical, and most importantly, their actions and decisions reflect this philosophy and ultimately their membership in a given profession. Individuals who are attracted to a given profession are attracted because of the guiding principles of the profession.
Organizations within a profession can provide unity to practitioners relative to common goals and shared problems. Associations within a profession provide opportunities for engagement through social functions as well as group problem solving of shared concerns. Associations work so that the practitioner does not cope with social and economic matters relative to the profession alone. Within financial planning, the Financial Planning Association (FPA®) and the National Association of Personal Financial Advisors (NAPFA) provide a voice to practitioners regarding issues and challenges within financial planning as well as opportunities to engage through conference and electronic means.
Personal financial planning has grown and evolved considerably over the past several decades. As described earlier, the field contains many of the primary attributes of a profession. The education, objectives, professional code of ethics, and associations have provided financial planning with the framework to become a robust profession. However, there is considerable work yet to be done in each of these areas. Education of current and future practitioners requires additional qualified faculty providing contextual learning experiences based on practice and empirical research. Leaders in education and the profession must be equally skilled in professional practice as well as in conducting lines of inquiry that will challenge and refine all areas of practice. Practitioners must continue to wholeheartedly embrace the notion of service and the responsibilities that come from serving an important function to the general population. Professional standards and ethical codes within financial planning must continue to be followed and enforced by leaders in the profession such as the CFP Board and the Financial Planning Standards Board. Finally, professional organizations must continue to provide a platform for practitioners to engage one another as well as explore critical problems and opportunities within this exciting and growing field.
It is our hope that this book, a handbook outlining the what, why, how, and when of this exciting field, can enable personal financial planning to take one more critical step toward becoming a mature profession.
About the Practice Questions
Visit www.wiley.com/go/wileycfpboard2e to access nearly 400 practice questions. Your access code is at the back of this book. CFP® professionals in the United States can also choose to obtain the full 28 credit hours by taking and passing the test.
About the Contributors
Charles R. Chaffin, EdD
Dr.
Malcolm Gladwell,
L. H. Furguson and J. D. Ramsay, “Professional Issues Development of the Profession: The Role of Education & Certification in Occupational Safety Becoming a Profession,”
Andrew Brien, “Professional Ethics and the Culture of Trust,”
Everett C. Hughes, “Professions,”
Jeanne F. Backof and Charles L. Martin, Jr., “Historical Perspectives: Development of the Codes of Ethics in the Legal, Medical and Accounting Professions,”
Ibid.
Michael Davis, “Thinking Like an Engineer: The Place of a Code of Ethics in the Practice of a Profession,”
Jonathan Rose, “The Legal Profession in Medieval England: A History of Regulation,”
CFP Board,
