Insurance and Financial planners

Introduction

Complying with the rules of ethics and rigorous standards of practice is essential for maintaining the public’s trust. It is therefore crucial that members comply with all rules.

The Code of ethics of the Chambre de la sécurité financière sets out duties and obligations towards clients. In order to illustrate the application of the various provisions of the Code of ethics of the Chambre de la sécurité financière, certain case studies drawn from cases heard by the CSF’s Disciplinary Committee will be presented. These will provide you with a better understanding of your obligations.

As a professional, you must take reasonable steps to ensure you advise your clients properly. You must therefore act with integrity and in a conscientious manner, giving clients all the information that may be necessary or useful. This means you must give clients all the information about the products or services you are offering them. You must do so in a complete and objective manner, by disclosing all their advantages and disadvantages.

9. 9. In the practice of his profession, a representative must take into account the limits of his knowledge and the means available to him. He must not undertake or continue a mandate for which he is not sufficiently prepared without obtaining the necessary assistance.

Annotations

A representative must take into account the limits of his knowledge and refrain from making false “representations” regarding his level of competence. He must also demonstrate availability and diligence. 

For more information on this subject, also see InfoDéonto: Mandat.

10. 10. A representative must not make any false representations as to his level of competence or the quality of his services, or those of his firm or his independent partnership.
11. Annotations
12. Moreover, section 14 of the Regulation respecting the pursuit of activities as a representative specifically provides that a representative must refrain from soliciting clients by referring to his financial performance or appearing to promise profits.
13. For more information on this subject, also see Info-déonto: Publicité.

11. 11. A representative must practise with integrity.
12. Annotations
13. In order to maintain the public’s confidence, a representative must act with integrity and honesty in the pursuit of his activities. He must act in a transparent and professional manner.
14. In this regard, please also refer to section 16 of the Act respecting the distribution of financial products and services.à
15. For example, a representative does not act with integrity and honesty when he:

• Misappropriates sums belonging to a client;
• Carries out transactions without the client’s authorization;
• Forges a client’s signature;
• Witnesses a client’s signature without being in the client’s presence.

Case study - CV13 (only available in French)

12. 12. A representative must act towards his client or any potential client with integrity and as a conscientious adviser, giving him all the information that may be necessary or useful. He must take reasonable steps so as to advise his client properly.
13. Annotations
14. Throughout his mandate, the representative must give his client all the information necessary for the client to understand the products and services the representative is offering him. This obligation requires more than merely explaining the recommended product; the representative must also ensure that the client has properly understood the explanation. Section 28 of the Act respecting the distribution of financial products and services provides as follows:
15. “Insurance representatives must, before making an insurance contract, describe the proposed product to the client in relation to the needs identified and specify the nature of the coverage offered.
16. Insurance representatives must also indicate clearly to the client any particular exclusion of coverage, if any, having regard to the needs identified and provide the client with the required explanations regarding such exclusions.”
17. Moreover, a representative must refrain from making statements that are inaccurate or incomplete, such as:
18.  
19. • Failing to explain the characteristics and specific features of a product, such as the coverage and any exclusions;
    • Failing to ensure that the product information is accurate;
    • Providing false information about a product;
    • Claiming that there are no fees or failing to disclose them;
    • Failing to explain the risks related to a transaction or the consequences of a withdrawal;
    • Making false “representations” regarding the rate of return of a product.

For more information on this subject, also see Info-déonto: Recommandations

Case study – CV4 (only available in French)

13. 13. A representative must fully and objectively explain to his client or any potential client the type, advantages and disadvantages of the product or service that he is proposing to him and must refrain from giving information that may be inaccurate or incomplete.
14. Annotations
15. For more information on this subject, also see Info-déonto: Recommandations
16. Case study – CV5 (only available in French)
18. 14. A representative must provide his client or any potential client with the explanations the client needs to understand and evaluate the product or services that he is proposing or that he provides to the client.
19. Annotations
20. First and foremost, a representative must take into account his client’s level of knowledge about the products and services he is offering the client. A less experienced client could require a much more detailed explanation than one with more experience. A representative must therefore take all the necessary measures to ensure the client has understood the explanation.
21. For example, the representative may use practical examples and sales illustrations in the form of tables in order to explain as clearly and completely as possible the particular characteristics of the product he is offering the client.
22. For more information on this subject, also see Info-déonto: Recommandations
23. Case study – CV6 (only available in French)

15. 15. Before providing information or making a recommendation to his client or to any potential client, a representative must seek to have a complete understanding of the facts.
16. Annotations
17. Like all other professionals, a representative must ensure he has a full understanding of the facts and the client’s situation before making a recommendation.
18. A financial needs analysis is a good means for gaining a full understanding of the facts and the client’s situation. In this regard, section 6 of the Regulation respecting the pursuit of activities as a representative sets out the information a representative should record in writing in order to satisfy his obligation to carry out a financial needs analysis. This obligation also requires that the representative have a full understanding of the products and services being offered to the client.
19. For more information on this subject, also see Info-déonto: Connaissance du client et Connaissance du produit 
20. Case study – CV8 (only available in French)
21.  

16. 16. No representative may, by whatever means, make statements that are incomplete, false, deceptive or liable to mislead.
17. Annotations
18. For more information on this subject, also see Info-déonto: Recommandations
19. Case study – CV7 (only available in French)

17.  
18. 17. Le représentant ne peut s’approprier, à ses fins personnelles, les sommes qui lui sont confiées ou les valeurs appartenant à ses clients ou à toute autre personne et dont il a la garde.

Case study – CV14 (only available in French)

18.  
19. 18. A representative must, in the practice of his profession, always remain independent and avoid any conflict of interest.
20. Annotations
21. A representative must avoid being in a situation of conflict of interest. The following are examples of situations of conflict of interest:

• • The representative borrows sums of money from a client on his own behalf or on behalf of a company that belongs to him;
  • The representative advises a client to invest in a company in which he has an interest;
  • The representative favours his own interests over the client’s interests.
•  

These obligations are set out in sections 18, 19 and 20 of the Code of ethics of the Chambre de la sécurité financière.

For more information on this subject, also see Info-déonto: Gestion des conflits d’intérêt

Case study – CV10 (only available in French)

19.  
20. 19.  A representative must subordinate his personal interests to those of his client or any potential client. Without limiting the generality of the foregoing, the representative:

 (1) may not advise a client to invest in a legal person, partnership or property in which he has, directly or indirectly, a significant interest;

(2) may not conduct any transaction or enter into any agreement or contract whatsoever with a client who, manifestly, is unable to manage his affairs, unless the decisions to conduct these transactions or enter into these agreements or contracts are made by persons who may legally decide in lieu of this client;

(3) may not conduct any transaction or enter into any agreement or contract whatsoever in the capacity of representative with respect to a client for whom he acts as dative tutor, curator or adviser within the meaning of the Civil Code.

Annotations

In this regard, section 26 of the Act respecting the distribution of financial products and services also deals with situations which may give rise to conflicts of interest: “Insurance representatives must, when placing a risk with an insurer with which they have, or with which the independent partnership or firm for which they act has, a business relationship, disclose that relationship to the person with whom they are transacting business.

Any direct or indirect interest held by an insurer in the ownership of a firm or held by a firm in the ownership of an insurer, and the granting by an insurer of any benefit or other interest determined by regulation, constitutes a business relationship.”

For more information on this subject, also see Info-déonto: Gestion des conflits d’intérêts

Case study – CV11 (only available in French)

20.  
21. 20.  A representative must be objective when his client or any potential client asks him for information. He must express opinions and make recommendations objectively and impartially, without considering his personal interest.
22. Annotations
23. For more information on this subject, also see Info-déonto: Gestion des conflits d’intérêts
24. Case study – CV12 (only available in French)

21.  
22. 21. A representative must ignore any intervention by a third party that could influence the way in which he performs the duties related to his practice to the detriment of his client or any potential client.
23. 22. A representative must not pay or undertake to pay to a person who is not a representative any compensation, any remuneration or any other advantage, except where permitted by the Act respecting the distribution of financial products and services (chapter D-9.2).
25. Annotations
26.  
27. For more information on this subject, also see Info-déonto: Partage de commissions.
28. Case study – CV23 (only available in French)

23. 23. A representative must demonstrate availability and diligence with respect to his client or any potential client.
24. Annotations
25. This obligation implies that a representative must respond to clients within a reasonable time frame, follow up appropriately on his files and be attentive to clients’ needs. 
26. For more information on this subject, also see this page.
27. Case study – CV16 (only available in French)

24.  
25. 24. A representative must report to his client on any mandate given to him and must carry out the mandate diligently.
26. Annotations
27. As the mandatary of his client, a representative must always act in the best interests of his client and carry out his mandate prudently and diligently. He must also act with honesty and loyalty and avoid placing himself in a situation of conflict of interest.

A representative must also consider the limits of his knowledge before undertaking a mandate. If he is not sufficiently prepared or does not have all the necessary means to undertake or pursue the mandate, he must obtain the necessary assistance.

For more information on this subject, also see Info-déonto: Le mandat

Case study – CV9 (only available in French)

25.  
26. 25. In the practice of his profession, a representative must not, through dishonesty, fraud, trickery or other deceitful means, avoid or attempt to avoid his professional civil liability or that of the firm or independent partnership in which he practises.
27. 26. A representative must respect the secrecy of any personal information that he obtains about a client and only use that information for the purposes for which it was obtained, unless he is relieved of that obligation by a provision of a law or by order of a competent court.
28. Annotations
29. A representative must ensure that the information he holds about his clients remains confidential, unless disclosure of the information is permitted by a legal provision or court order. He is also required to use the information he has collected only for the purposes for which it was obtained and he must never use that information to the detriment of his clients.

These obligations are set out in sections 26 and 27 of the Code of ethics of the Chambre de la sécurité financière.

For more information on this subject, also see Info-déonto: Collecte, utilisation et protection des renseignements personnels 

27.  
28. 27. A representative must not disclose personal or confidential information that he obtained, except in accordance with the provisions of the Act, and must not use that information to the detriment of his client or to obtain an advantage for himself or for another person.

Annotations

It is also important to note that section 23 of the Act respecting the distribution of financial products and services provides that a representative must disclose all the information he gathers about his clients to the establishment to which he is attached. He may disclose such information only to a person authorized by law to receive it.

For more information on this subject, also see Info-déonto: Collecte, utilisation et protection des renseignements personnels 

Case study – CV15 (only available in French)

28.  
29. 28. A representative must not dissuade his client or any potential client from consulting another representative or another person of his choosing.

Annotations

For more information on this subject, also see Info-déonto: Publicité

29.  
30. 29. A representative must promptly give to his client, or to any person his client designates, the books and documents belonging to the client, even though the latter owes him sums of money.

Case study – CV17 (only available in French)

Complying with the rules of ethics and rigorous standards of practice is essential for maintaining the public’s trust. It is therefore crucial that members comply with all rules.

The Code of ethics of the Chambre de la sécurité financière sets out duties and obligations towards other representatives, firms, independent partnerships, insurers and financial institutions. In order to illustrate the application of the various provisions of the Code of ethics of the Chambre de la sécurité financière, certain case studies drawn from cases heard by the Chambre’s Disciplinary Committee will be presented. These will provide you with a better understanding of your obligations.

30.  
31. 30. A representative must not, directly or indirectly, make comments of any kind which are false, inaccurate or incomplete about another representative, a firm, an independent partnership, an insurer, a financial institution or one of their representatives, products or services.

Annotations

For more information on this subject, also see InfoDéonto: Marketing

31.  
32. 31. A representative must use fair methods of competition and solicitation.

Annotations

For more information on this subject, also see InfoDéonto: Marketing

32.  
33. 32. A representative must not denigrate, belittle or discredit another representative, a firm, an independent partnership, an insurer or a financial institution.

Annotations

A representative must not directly attack the professional competence of an individual or denigrate an issuer, insurer, firm or broker.

For more information on this subject, also see Info-déonto:  Marketing

Case study – CV18 (only available in French)

Introduction

Complying with the rules of ethics and rigorous standards of practice is essential for maintaining the public’s trust. It is therefore crucial that members comply with all rules.

The Code of ethics of the Chambre de la sécurité financière sets out duties and obligations towards insurers. In order to illustrate the application of the various provisions of the Code of ethics of the Chambre de la sécurité financière, certain case studies drawn from cases heard by the CSF’s Disciplinary Committee will be presented. These will provide you with a better understanding of your obligations.

As a professional in the insurance industry, you also have obligations towards insurers. In his dealings with insurers, a representative must not fail to pay them the sums of money he has collected on their behalf or fail to give them the information that it is common practice for him to provide. 

33. 33. A representative must not fail to pay an insurer, upon request or within the prescribed time, the sums of money that he has collected on its behalf.

Case study – CV19 (only available in French)

34. 34. A representative must give insurers the information that it is common practice for him to provide.

Case study – CV20 (only available in French)

Introduction

Complying with the rules of ethics and rigorous standards of practice is essential for maintaining the public’s trust. It is therefore crucial that members comply with all rules.

The Code of ethics of the Chambre de la sécurité financière sets out duties and obligations towards insurers. In order to illustrate the application of the various provisions of the Code of ethics of the Chambre de la sécurité financière, certain case studies drawn from cases heard by the CSF’s Disciplinary Committee will be presented. These will provide you with a better understanding of your obligations.

35. 35. A representative must not practise dishonestly or negligently.

Cas vécu – CV21

36. 36.  A representative must not, directly or indirectly, without the knowledge of the insurer, give a discount on a premium stipulated in an insurance contract or agree to a premium payment method different from the one provided for in the contract.

Annotations

You must not give a discount to an insured without the insurer's knowledge, nor must you agree to a method of premium payment that differs from that provided for in the policy. In addition, you may not pay an unauthorized person, and a commission may only be shared with those authorized by law.

For more information on this subject, also see InfoDéonto: Rémunération.

Cas vécu – CV22

37. 37. A representative must not, directly or indirectly, pay a person to act in the capacity of representative if that person does not hold a certificate.

Annotations

For more information on this subject, also see InfoDéonto Partage de commissions.

Cas vécu – CV23

38. 38. A representative must not accept payment from a person who does not hold a certificate and who acts or attempts to act as a representative through a representative who holds a certificate.

Annotations

For more information on this subject, also see InfoDéonto Rémunération.

39. 39. Subject to the provisions of the Act, a representative must not receive or arrange to receive payment from a person other than the person who retained his services.

Annotations

Pour plus de détails à ce sujet, voir également Info-déonto: Rémunération.

40. 40. A representative must not share his commission, except within the limits permitted by the Act.

Annotations

In this regard, you can also consult sections 24, 100 and 143 of the Act respecting the distribution of financial products and services and sections 22 to 25 of the Regulation respecting firms, independent representatives and independent partnerships, which deal with the register of commissions and the procedures to be followed when sharing commissions.

For more information on this subject, also see InfoDéonto: Rémunération.

41. 41. A representative must not promise or pay compensation, in any form whatsoever, for his services to be retained.

Annotations

For more information on this subject, also see InfoDéonto: Rémunération.

42. 42. A representative must, without delay, reply in full and courteously to any correspondence from the syndic, the co-syndic, an assistant of the syndic, an assistant of the co-syndic or a member of their staff acting in their capacity.

Annotations

A representative must, without delay, reply in full and courteously to any correspondence from the syndic, the co-syndic, an assistant of the syndic, an assistant of the co-syndic or a member of their staff acting in their capacity. He/she must also attend any meeting to which he/she is summoned and not interfere with the work of the CSF syndic.

Failure to cooperate constitutes a serious breach of ethical obligations.

It is important to remember that cooperating with an investigation can be in the representative's best interest as it is a good way to ensure that all relevant information is noted in the file.

For more information on this subject, also see  Vous êtes sous enquête? and Déroulement d’une enquête.

Cas vécu – CV24

43. 43. A representative must, in particular, appear before the syndic, the co-syndic, an assistant of the syndic, an assistant of the co-syndic or a member of their staff as soon as he is required to do so.

Annotations

For more information on this subject, also see Vous êtes sous enquête? and Déroulement d’une enquête.

Cas vécu – CV25

44. 44. A representative must not interfere with the work of the Autorité des marchés financiers, the Chamber or one of its committees, the syndic, an assistant of the syndic, the co-syndic, an assistant of the co-syndic or a member of their staff or an officer of the Chamber.

Annotations

For more information on this subject, also see Vous êtes sous enquête? and Déroulement d’une enquête.

Cas vécu – CV26

45. 45. A representative must inform the Authority when he has reasonable grounds to believe that another representative is unfit to practise in this capacity, is practising incompetently or dishonestly, or is contravening the provisions of the Act and its regulations.

Annotations

For more information on this subject, also see Formuler une plainte.

46. 46. A representative who is informed that the syndic, the co-syndic, an assistant of the syndic or an assistant of the co-syndic is conducting an inquiry into his professional competence or conduct, or that a disciplinary complaint has been notified to him pursuant to section 132 of the Professional Code (chapter C-26) must not communicate with the person who requested the holding of the inquiry nor with the witnesses who have been summoned for the complainant in accordance with section 146 of that Code, except with prior written permission from the syndic, the co-syndic, an assistant of the syndic or an assistant of the co-syndic.

Annotations

For more information on this subject, also see Vous êtes sous enquête? and Déroulement d’une enquête.

Cas vécu – CV27

Introduction

CSF members are entitled to use the CSF’s logo on their business cards or other documents, provided they use the logo bearing the words “Member of the Chambre” and they comply with the following conditions:

47.  

48. 47. If a representative uses the graphic symbol of the CSF for publications or advertisements of any kind, he must make sure that it is in conformity with the original held by the secretary of the CSF.

    Annotations

    For more information on this subject, also see Info-déonto: Logos .

49.  

50. 48. Where a representative uses the graphic symbol of the CSF for advertising purposes, other than on a business card, he shall include the following warning in the advertisement: “This advertisement does not originate from the Chambre de la sécurité financière and does not commit its liability.”

Introduction

As a financial planning professional, you have acquired knowledge and credibility allowing you to establish a relationship of trust with your clients. In order to maintain the public’s trust, the law imposes ethical and regulatory obligations.

As a financial planner who is a member of the CSF, the Code of ethics of the Chambre de la sécurité financière applies to you. It is therefore important that you conduct yourself in accordance with the standards set out in the Code.

Sections 49 to 51 of the Code contain obligations that apply specifically to financial planners. For the other ethical obligations that apply to the pursuit of activities as a financial planner, please refer to the section on Insurance. (lier avec la section Assurance du code annoté)

49.  

50. 49. This Division applies only to a representative who is entitled to use the title of financial planner or a similar title in accordance with the Act respecting the distribution of financial products and services (chapter D-9.2) and its regulations.

    Annotations

    For more information on this subject, also see Info-déonto: Titres professionnels

51.  

52. 50. When soliciting clients, a representative must avoid using methods that would have the effect, in particular, of emphasizing a specific aspect of financial planning in order to unduly attract the attention of a potential client.

    Annotations

    For more information on this subject, also see Info-déonto: Mandat .

53.  

54. 51.  A representative must refrain from:
     (1) out of malice, making an unfounded accusation against another representative, a firm or an independent partnership;
     (2) directly or indirectly paying a person who is not legally entitled to use the title of financial planner to act in that capacity or to use that title;
     (3) directly or indirectly accepting or receiving payment from a person who is not legally authorized to use the title of financial planner and who acts or attempts to act in that capacity;
     (4) not informing his client as soon as he is aware of a problem that will prevent him from continuing with his mandate.

    Annotations

    For more information on these subjects, also see Info-déonto:

    • • Marketing
      • Rémunération 
      • Mandat