Code of Ethics & Statement of Principles
This Code of Ethics applies to all financial transactions, without regard to the product category, the type of intermediary, or the means by which the purchase of a product or service is transacted. If any principle or practice is inconsistent with a provision of an applicable law or regulation, the applicable law or regulation will take precedence.
- Interests of Client – It is paramount that a broker shall place the interest of his/her client ahead of all other interests.
- Needs of Client – Before giving advice or making recommendations, a broker shall make a diligent effort to learn the client’s needs, objectives and circumstances, and to then offer products or services to fulfill them. A broker must not recommend the replacement of any insurance policy, or any investment or purchase of a financial product unless he/she believes that such a replacement, investment or purchase is in the best interest of the client.
- Legitimacy of Client and Transaction – A broker shall collect enough information about the client and the proposed transaction to reasonably determine the identity of the client and that the transaction is lawful. The broker must not act on behalf of a client when there are reasonable grounds to believe that the transaction is of an unlawful nature. A broker must not knowingly submit information on an application for any financial product or service to a company that is inaccurate or misleading.
- Professionalism of Broker – A broker should possess an appropriate level of knowledge relating to his/her particular business and meet high standards of professional ethics, including acting with honesty, integrity, fairness, due diligence and skill. Continuing education should be pursued as a means of keeping skill and knowledge levels current and at all times meet any regulatory requirements. A broker must ensure that his/her financial records are properly maintained and follow sound business practices. A broker must ensure that all financial obligations are met and meet all regulatory requirements for professional liability insurance, trust accounts, deposits, or other fiduciary measures.
- Disclosure of Broker Information – A broker must not misrepresent his/her education, qualifications, or experience, and should inform the client of the business licenses and registrations held, as well as the business name(s) of firm(s) under which he or she is licensed to operate. He/she should ensure that all references to his/her business activities, services, and products are clear, descriptive, and not misleading.
- Disclosure of Financial Products Information – When recommending a transaction to a client, a broker must disclose all relevant facts, considerations, costs and risks necessary for an informed decision which are reasonably available to the broker. This disclosure should be in writing, and a written receipt obtained from the client. A broker may not be misleading as to the terms, costs, benefits, or risks of any proposed course of action. In addition to clearly describing the product or service for the client, the broker must disclose important assumptions underlying any illustrations or examples that have been provided to the client, as well as the fact that actual results may differ significantly from those shown. The broker should avoid using examples or illustrations which he or she knows, or ought to know, are based on unusual results or a period that generated much better than normally anticipated performance. A broker must deliver all policies, amendments, and other documents, in a timely manner and must advise the client, in writing, if an issued policy or product is materially different from the policy applied for or product purchased.
- Confidentiality – A broker will protect the privacy and confidentiality of client personal information. Client information relating to any insurance policies, products purchased, or investments held, may not be disclosed to any individual or company without express written permission of the client.
- Conflicts of Interest – A broker must disclose to a prospective buyer of financial products all conflicts or potential conflicts of interest associated with any recommendations and transactions, and the client should then be given the opportunity to halt the transaction, to seek additional professional advice, or complete the transaction.
- Behaviour – A broker must act in good faith at all times, and meet high standards of professional ethics, including acting with honesty, integrity, fairness, due diligence, and skill. He/she may not engage in behaviour that is likely to be detrimental to the public professional image of IFB, the financial services industry, or other financial professionals. A broker must deal directly with all formal and informal complaints or disputes, or refer them to the appropriate person or process, in a timely and forthright manner. Complaints, or incidents which may give rise to a claim, must be reported to the errors and omissions insurer as soon as a broker has knowledge of them.
- Independence – An IFB voting member must maintain his/her independence within IFB membership requirements.
Statement of Principles of Independent Financial Brokers of Canada
Independent Financial Brokers of Canada is an Association created to represent licensed professional financial brokers and to provide a forum for them to develop opinions, recommendations and programs, and to preserve choice in the delivery of financial products and services for consumers and brokers within this marketplace. These are our core principles:
- IFB supports a neutral law controlling differing systems of distribution, excluding none.
- IFB seeks a regime in which participants of all financial distribution systems are licensed and subject to appropriate regulatory controls.
- IFB affirms that its members are able to undertake any other occupation, when necessary, within the requirements of the licenses held.
- Within the limits allowed by law, IFB members are required to maintain an arm’s length relationship with all financial product providers with whom they are contracted.
- IFB supports ongoing education for all licensees, and in particular, expects its members to be thoroughly proficient, trained and knowledgeable in the financial products and services they provide to consumers.
- IFB believes that all financial brokers in Canada should be subject to a code of conduct, and in particular, expects its members to adhere to IFB’s Code of Ethics.
- IFB supports the promotion and preservation of the common and specific interests of Association members as a professional body, with full support for the principle of freedom in their business operations.
IFB seeks to foster a co-operative relationship with the public, the federal and provincial authorities and all other organizations associated with the provision of financial products and financial planning, in order to contribute to the successful development and continuation of high professional standards within the financial services industry in Canada, and to further consumer financial literacy and consumer protection.